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920 So.2d 479
Page 1
920 So.2d 479
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
Slip Copy, 2006 WL 759658 (Ohio App. 2 Dist.), 2006 -Ohio- 1427
FOX & LAMBERTH ENTERPRISES, INC., et al. PlaintiffAppellee
v.
CRAFTSMEN HOME IMPROVEMENT INC. Defendant-Appellant.
No. 21060.
Decided March 24, 2006.
, J.
*1 {¶ 1} This case is before us on the appeal of Defendant, Craftsmen Home Improvement, Inc. (Craftsmen), from
a trial court decision awarding $41,262.32 in damages to Plaintiffs, Fox and Lambreth Enterprises, Inc. (Fox
Enterprises), and Daniel Fox. As a single assignment of error, Craftsmen claims that “the trial court erred in
*1 {¶ 3} In the first “argument,” Craftsmen contends that “an oral contract for the lease of property which includes
attached fixtures and whose payment is not contemplated within one year violates and .” This particular argument
is divided into four sub-parts, which all relate to the Statute of Frauds and to Craftsmen's position that exceptions
to the Statute of Frauds cannot validate the oral contract that was involved in this case.
A. Alleged Oral Contract for Lease of a Commercial Property
thereunto by him or her lawfully authorized.”
*1 {¶ 6} According to Craftsmen, there were three separate contracts in this case, and the predominant purpose
of all the contracts was a lease for property, which was unenforceable because it was oral. We disagree, because
the evidence does not indicate that the parties intended to enter into a contract for a lease. In fact, none of the
writings even mention a lease agreement.
be moved and changed. The displays were intricate and accessorized, including towel bars, soap dishes,
wallpaper, and so forth, such that when customers walked in, they would feel like the display was their own
kitchen or bathroom. Better Kitchen was very much an upscale business.
*2 {¶ 8} Craftsmen was also in the bath and kitchen business, but was less upscale, so they were not really a
competitor of Better Kitchen. For about two years before 1998, Better Kitchen had done counter top fabrication for
*2 {¶ 10} In September, 1998, Craftsmen heard that Fox was planning to close his business. Subsequently, both
Ron Piatt and Doug Readnower checked out Better Kitchen's showroom, and Readnower then met with Fox. The
first meeting was on September 17, 1998, and led to a series of meetings in September and October, during
which Readnower, McCloskey, and Fox discussed the sale of the business.
*2 {¶ 11} Craftsmen was not interested in purchasing Fox's office equipment, shop material, or shop equipment,
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of the meetings, Readnower walked through the showroom and designated what he wanted. Based on this
discussion, Fox made up a list of assets that were to be purchased, and set a price of $50,000. There were also
discussions about Fox becoming a Craftsmen employee, doing either sales or fabrication. In addition, Fox agreed
to give Craftsmen a list of his previous customers and to direct any future business to Craftsmen.
dated October 26, 1998. The first document was entitled “Bill of Sale,” and included, as Exhibit A, the list of
displays Fox had prepared. The bill of sale stated that Better Kitchen and Fox had agreed to sell Craftsmen the
list of items in Exhibit A, for $20,000. The second document was entitled “Covenant Not to Compete,” and
indicated that in consideration of $30,000, payable in 36 monthly payments beginning on December 1, 1998, Fox
would not compete with Craftsmen in the field of sales of kitchen or bathroom remodeling services in a five-county
his bank regarding a lien the bank had on his business assets. Fox testified that the lien was for equipment that
was not part of the assets being sold. He also indicated that he was going to pay off the lien with the sale
proceeds. Readnower testified that whether the liens were released or were paid was not a problem; Craftsmen
simply wanted the liens taken care of. Furthermore, the parties had never discussed liens before Readnower
gave Fox the Bill of Sale and Covenant Not to Compete.
Readnower stated at trial that certain conditions in the covenant not to compete were also unacceptable. For
example, the geographical distance had been decreased to ten miles. The lien provision was also different.
*3 {¶ 16} At trial, Readnower and McCloskey both testified that they were not simply interested in buying fixtures,
and that they told Fox that no deal could be struck unless they obtained a satisfactory lease for the building.
However, none of the written documents mentioned anything about a lease. Readnower additionally testified that
business and would like to stay on at the Dayton-Xenia Rd. location. At the time, Better Kitchen had a lease with
Hussong that would not have expired until March 31, 2000. However, Craftsmen was not interested in subletting,
but instead wanted its own lease. At this meeting, Craftsmen gave Mr. Hussong some specific numbers on a
lease, and Mr. Hussong said he would turn the matter over to his attorney and they would discuss it.
*4 {¶ 18} After reaching a deal with Craftsmen, Fox told his employees that he was selling the business to
*4 {¶ 19} On Saturday, October 31, 1998, six of the seven stockholders in Craftsmen, representing about 88% of
the total stock interest, came to Better Kitchen's showroom and extensively modified the premises. Craftsmen cut
920 So.2d 479
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920 So.2d 479
920 So.2d 479
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920 So.2d 479
not to compete. We agree with this finding, because the non-competition issue was not even discussed until after
*6 {¶ 31} In view of the preceding discussion, the second sub-argument is without merit.
C. Oral Contract for Sale of Goods under
*6 {¶ 32} In the third sub-argument, Craftsmen contends that the Statute of Frauds in applies, and that the trial
court erred in finding a partial performance exception to the statute. As we mentioned, contains the Statute of
Frauds governing the sale of goods. provides that:
*6 {¶ 34} Craftsmen raised this defense at trial, but the magistrate found that an exception in applied. Under this
exception, a contract that does not satisfy the requirements of division (A) but which is valid in other respects may
be enforced:
*6 {¶ 35} “with respect to goods for which payment has been made and accepted or which have been received
and accepted in accordance with .” .
part performance can be shown under ]. Partial performance in the present case occurred when Craftsmen
entered the Better Kitchen showroom, modified displays, and removed portions of the displays to Craftsmen's
showroom. These actions were inconsistent with ownership of the assets by Better Kitchen.
*7 {¶ 38} In this regard, Craftsmen argues that the trial court improperly mixed the “use of the premises” with the
“sale of goods.” We disagree. Craftsmen did make significant alterations to the leased premises, but its
that time, Fox and Craftsmen had concluded a deal for the sale of the displays, and Fox had given Craftsmen a
key so that Craftsmen could enter the premises at will. Fox's presence on the premises that day was not an
assertion of ownership over the assets that had been sold; he was merely finishing up fabrication of counter top
orders that were placed before he closed his business.
*7 {¶ 40} Other acts of Craftsmen were also consistent with partial performance of the contract. For example,
being purchased, referring to the laboratory by a new name, requesting that the seller dismiss an employee who
would not be retained, holding an office party, and directing daily operation of the laboratory for several days,
were acts of partial performance that, if proven, constituted acceptance of goods under and ).
*8 {¶ 41} As we mentioned, in approving the magistrate's decision, the trial court focused on a traditional
definition of part performance, and did not discuss and . Because the Uniform Commercial Code applies, rather
920 So.2d 479
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© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
than , the trial court should have referred to and . Nonetheless, the trial court clearly agreed with the magistrate
and did reach the correct conclusion on the merits. Therefore, we can affirm the judgment, since the error was not
prejudicial. citing .
*8 {¶ 42} As a final matter, we note that Craftsmen has made a somewhat convoluted argument about “” and the
fact that the parties had “agreed” that no goods were exchanged under the contract. First of all, there is no
D. Partial Performance
*8 {¶ 44} Craftsmen's final sub-argument is that where an unsigned lease exists, possession of premises and
payment of rent are still not enough to establish partial performance of a lease. In support of this position,
Craftsmen relies primarily on and . Both of these cases deal with partial performance and the statute of
conveyances.
Statute of Frauds in . Nonetheless, even if were applicable, the requirements for the partial performance
exception would have been satisfied.
*8 {¶ 47} As a general matter, agreements may be removed from the operation of the Statute of Frauds by partial
performance “only where the party relying on the agreement changes his position to his detriment, thereby
making it impractical or impossible to return the parties to their original status.” . Where contracts for real estate
return the parties to their original status.
*9 {¶ 49} In reviewing the evidence, it is clear that Fox changed his position to his detriment and that returning the
parties to their original status would have been impractical or impossible. Fox's actions were also exclusively
referable to the agreement and the performance cannot be accounted for in any other manner than having been
done in pursuance of the agreement. at paragraph three of the syllabus.
relying detrimentally on the fact that Craftsmen had agreed to buy the assets of Better Kitchen. Accordingly, we
reject the claim that the requirements for partial performance were not satisfied.
*9 {¶ 51} As we have stressed, and the traditional partial performance exception to the Statute of Frauds do not
apply to this case. However, even if they did apply, the exception was satisfied.
*9 {¶ 52} Because all the sub-arguments are without merit, the first argument is overruled.
transaction to be in two separate documents. Readnower also did not agree to the terms.
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*9 {¶ 54} Both the magistrate and trial court found that the terms of the above agreements were proposals for
addition to the contract, but did not become part of the contract under because they were rejected. However, the
magistrate and trial court noted that under ,
*10 {¶ 55} “[c]onduct by both parties that recognizes the existence of a contract is sufficient to establish a contract
for sale although the writings of the parties do not otherwise establish a contract. In such case, the terms of the
particular contract consist of those terms on which the writings of the parties agree * * *.”
*10 {¶ 56} The magistrate and trial court found that the situation outlined in precisely fit what had taken place,
and further concluded that the parties' conduct recognized the existence of a contract. Consequently, they found
that the purchase of the displays for $50,000 was enforceable. We agree with these findings. There was
*10 {¶ 58} Based on the preceding discussion, the second argument is without merit and is overruled.
III
*10 {¶ 59} In the third argument, Craftsmen claims that a contract may not be sustained where there is a mutual
mistake on the part of the parties. To support this argument, Craftsmen raises two alleged mutual mistakes. The
first is that the landlord would grant a reasonable lease so that Craftsmen could lease the premises where the
the express or implied consent of the parties. .
*10 {¶ 61} In the present case, Craftsmen did not raise mutual mistake in its answer, nor did it ask to amend the
pleadings after the trial to raise the issue. Therefore, we conclude that the matter has been waived. Craftsmen did
raise mutual mistake in its objections, but only in connection with the lease, not with regard to any encumbrances
on the displays. Assuming for the sake of argument that the matter was sufficiently raised in connection with the
Craftsmen a reasonable lease. As we stressed earlier, the lease was not even mentioned in the documents that
were exchanged. This contradicts Craftsmen's claim that the lease was critical. In addition, Fox testified that no
one ever stated that the deal was contingent upon Craftsmen getting a lease with the landlord, thereby indicating
that if a mistake existed, it was not mutual. Accordingly, even if we considered the defense of mutual mistake, we
would find it without merit.
indicated that he intended to pay off the liens with the sale proceeds. And finally, we note Readnower's testimony
that the issue of liens did not arise until after Fox received the Bill of Sale and Covenant Not to Compete.
Because the magistrate found that the Bill of Sale and Covenant were generated after the parties reached
agreement, the presence of any liens could not have been a mutual mistake about a basic assumption at the time
the contract was formed.
920 So.2d 479
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apparent authority to bind Craftsmen on the contract. Although the magistrate and trial court found that
Readnower had apparent authority, Craftsmen contends that Readnower's acts alone could not establish
(2) that the person dealing with the agent knew of those facts and acting in good faith had reason to believe and
did believe that the agent possessed the necessary authority.” Id. at syllabus.
*12 {¶ 69} In Master Consolidated, the court went on to clarify the relationship between estoppel and apparent
authority. Specifically, the court said that the two concepts:
*12 {¶ 70} “ ‘are similar in that they are based on the underlying principle that a person shall be bound by his
quoting from 1 Ohio Jury Instructions (1990) 200, Section 15.10.
*12 {¶ 71} Some courts have held that agency by estoppel and apparent authority are equivalent, and are based
on the same elements. See . Regardless of which view is applied, there was sufficient evidence that Craftsmen
held Readnower out as authorized to act for the corporation in this transaction.
*12 {¶ 72} Notably, Readnower was vice-president and treasurer of Craftsmen, and was a 25% stockholder.
displays and to remodel. Under the circumstances, it is clear that Craftsmen clothed Readnower with apparent
authority to act on its behalf.
*12 {¶ 73} Even if we did not find apparent authority, we would conclude that Fox established agency by
estoppel. In the Ohio Supreme Court held that:
*12 {¶ 74} “ ‘[w]here a principle [sic] has, by his voluntary act, placed an agent in such a situation that a person of
*13 {¶ 75} Furthermore, while ratification of an agent's acts is not required, the majority of Craftsmen's
stockholders entered Better Kitchen and exerted control over the displays. A reasonable interpretation of these
actions is that a majority of the stockholders ratified Readnower's authority and agreement to a contract. .
*13 {¶ 76} In light of the preceding discussion, the fourth argument is without merit and is overruled.
V. Damages
reselling and recovering damages under , recovering for non-acceptance under , or recovering the price under .
The official comment to stresses that sellers are not required to elect a remedy and that the remedies are
cumulative in nature. In the present case, the recovery Fox obtained fits within “non-acceptance” under . This
section provides that: “(A) Subject to division (B) of this section and to the provisions of with respect to proof of
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the market price at the time and place for tender and the unpaid contract price together with any incidental
damages provided in , but less expenses saved in consequence of the buyer's breach.
*13 {¶ 79} “(B) If the measure of damages provided in division (A) of this section is inadequate to put the seller in
as good a position as performance would have done then the measure of damages is the profit, including
reasonable overhead, which the seller would have made from full performance by the buyer, together with any
the contract been performed.” ’ (citation omitted). It is also consistent with the general philosophy of the Uniform
Commercial Code that the remedies provided “shall be liberally administered to the end that the aggrieved party
may be put in as good a position as if the other party had fully performed.” .
*14 {¶ 81} As we mentioned, Craftsmen claims that the evidence about damages was speculative. Again, we
disagree. Both sides assigned a value of $50,000 to the displays. While Readnower testified that the displays
point was substantiated by a witness, who saw Fox and a former partner breaking up the contents of the
showroom and throwing displays in a large rollout dumpster during February, 1999. This was around the time the
lessor required Fox to vacate the premises. Fox told this witness at the time that he was throwing the goods away
because he had nowhere to store the items. There was also testimony from witnesses who corroborated the sale
of various items on the list.
of the record. We note that there were contradictions in the testimony of various witnesses, including Craftsmen
stockholders, as to a number of matters. This is not surprising, since nearly five years elapsed between the sale
and the time of trial. Both sides also kept rather poor documentation. The magistrate clearly found Fox more
credible, by accepting Fox's testimony as to the amount of goods he was able to sell.
*14 {¶ 85} We have stressed many times that credibility decisions belong to the trier of fact, which has the best
Craftsmen had breached the contract by not paying any of the $50,000 that was owed. The court also adopted
the magistrate's decision and entered judgment in Fox's favor in the amount of $41,262.32, which is the amount
found by the magistrate after deducting what Fox received for the goods he was able to sell. However, the trial
court did not specifically include a sentence stating that it was overruling the damage objection.
*15 {¶ 87} Although the issue is close, we find that remand is not required under the circumstances of this case,
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if only by implication. Id. at ¶ 13. We concluded that despite this fact, we were required to dismiss the case
because the court's journal entry failed to adopt the magistrate's decision, which was required by . Id. at ¶ 14-18.
In contrast to McCain, the trial court in the present case did adopt the magistrate's decision when it entered
judgment. Accordingly, we need not dismiss the appeal, nor must we remand the case. However, in the future,
the better practice for the court would be to explicitly state that all objections have been overruled.
*15 {¶ 89} Based on the preceding discussion, the fifth argument is without merit and is overruled.
VI. Ownership of the property
*15 {¶ 90} In its final argument, Craftsmen contends that Fox and Better Kitchen did not own the assets and had
nothing to sell, because Fox had taken out a loan with KeyBank that was secured by the assets that were being
sold. In our opinion, this is a non-issue.
*16 {¶ 92} Readnower's Bill of Sale states that:
*16 {¶ 93} “SELLERS warrants [sic] that there are no liens or encumbrances on the goods sold, and that
SELLERS' title to the goods is clear and merchantable. SELLERS shall also defend BUYERS from any adverse
claims to SELLERS' title to the goods sold.”
*16 {¶ 94} The subsequent purchase agreement that Fox submitted to Craftsmen stated that:
agreement, Fox's proposal was materially different from the provision in the Bill of Sale. Specifically, Fox's clause
indicates that title to the goods would be relinquished at the term (presumably the termination) of the purchase
agreement-which was scheduled to last for three years. Fox's proposal also materially differed from the Bill of
Sale because it omitted the “duty to defend.”
*16 {¶ 98} The magistrate did not discuss the proposals for liens and encumbrances in detail, beyond noting that
objection. If the trial court felt that the oral agreement was unenforceable, it would not have found a breach, would
not have adopted the decision of the magistrate, and would not have awarded judgment in the amount of
$41,262.32.
*16 {¶ 99} As a further matter, Craftsmen's breach of the agreement made the issue of liens or encumbrances
irrelevant. In view of Craftsmen's repudiation or non-acceptance, whether KeyBank or any other entity had an
*17 {¶ 100} Based on the above discussion, the sixth argument is without merit and is overruled.
*17 {¶ 101} Because all the arguments or assignments of error have been overruled, the judgment of the trial
court is affirmed.
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of the meetings, Readnower walked through the showroom and designated what he wanted. Based on this
discussion, Fox made up a list of assets that were to be purchased, and set a price of $50,000. There were also
discussions about Fox becoming a Craftsmen employee, doing either sales or fabrication. In addition, Fox agreed
to give Craftsmen a list of his previous customers and to direct any future business to Craftsmen.
dated October 26, 1998. The first document was entitled “Bill of Sale,” and included, as Exhibit A, the list of
displays Fox had prepared. The bill of sale stated that Better Kitchen and Fox had agreed to sell Craftsmen the
list of items in Exhibit A, for $20,000. The second document was entitled “Covenant Not to Compete,” and
indicated that in consideration of $30,000, payable in 36 monthly payments beginning on December 1, 1998, Fox
would not compete with Craftsmen in the field of sales of kitchen or bathroom remodeling services in a five-county
his bank regarding a lien the bank had on his business assets. Fox testified that the lien was for equipment that
was not part of the assets being sold. He also indicated that he was going to pay off the lien with the sale
proceeds. Readnower testified that whether the liens were released or were paid was not a problem; Craftsmen
simply wanted the liens taken care of. Furthermore, the parties had never discussed liens before Readnower
gave Fox the Bill of Sale and Covenant Not to Compete.
Readnower stated at trial that certain conditions in the covenant not to compete were also unacceptable. For
example, the geographical distance had been decreased to ten miles. The lien provision was also different.
*3 {¶ 16} At trial, Readnower and McCloskey both testified that they were not simply interested in buying fixtures,
and that they told Fox that no deal could be struck unless they obtained a satisfactory lease for the building.
However, none of the written documents mentioned anything about a lease. Readnower additionally testified that
business and would like to stay on at the Dayton-Xenia Rd. location. At the time, Better Kitchen had a lease with
Hussong that would not have expired until March 31, 2000. However, Craftsmen was not interested in subletting,
but instead wanted its own lease. At this meeting, Craftsmen gave Mr. Hussong some specific numbers on a
lease, and Mr. Hussong said he would turn the matter over to his attorney and they would discuss it.
*4 {¶ 18} After reaching a deal with Craftsmen, Fox told his employees that he was selling the business to
*4 {¶ 19} On Saturday, October 31, 1998, six of the seven stockholders in Craftsmen, representing about 88% of
the total stock interest, came to Better Kitchen's showroom and extensively modified the premises. Craftsmen cut
920 So.2d 479
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920 So.2d 479
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not to compete. We agree with this finding, because the non-competition issue was not even discussed until after
*6 {¶ 31} In view of the preceding discussion, the second sub-argument is without merit.
C. Oral Contract for Sale of Goods under
*6 {¶ 32} In the third sub-argument, Craftsmen contends that the Statute of Frauds in applies, and that the trial
court erred in finding a partial performance exception to the statute. As we mentioned, contains the Statute of
Frauds governing the sale of goods. provides that:
*6 {¶ 34} Craftsmen raised this defense at trial, but the magistrate found that an exception in applied. Under this
exception, a contract that does not satisfy the requirements of division (A) but which is valid in other respects may
be enforced:
*6 {¶ 35} “with respect to goods for which payment has been made and accepted or which have been received
and accepted in accordance with .” .
part performance can be shown under ]. Partial performance in the present case occurred when Craftsmen
entered the Better Kitchen showroom, modified displays, and removed portions of the displays to Craftsmen's
showroom. These actions were inconsistent with ownership of the assets by Better Kitchen.
*7 {¶ 38} In this regard, Craftsmen argues that the trial court improperly mixed the “use of the premises” with the
“sale of goods.” We disagree. Craftsmen did make significant alterations to the leased premises, but its
that time, Fox and Craftsmen had concluded a deal for the sale of the displays, and Fox had given Craftsmen a
key so that Craftsmen could enter the premises at will. Fox's presence on the premises that day was not an
assertion of ownership over the assets that had been sold; he was merely finishing up fabrication of counter top
orders that were placed before he closed his business.
*7 {¶ 40} Other acts of Craftsmen were also consistent with partial performance of the contract. For example,
being purchased, referring to the laboratory by a new name, requesting that the seller dismiss an employee who
would not be retained, holding an office party, and directing daily operation of the laboratory for several days,
were acts of partial performance that, if proven, constituted acceptance of goods under and ).
*8 {¶ 41} As we mentioned, in approving the magistrate's decision, the trial court focused on a traditional
definition of part performance, and did not discuss and . Because the Uniform Commercial Code applies, rather
920 So.2d 479
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© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
than , the trial court should have referred to and . Nonetheless, the trial court clearly agreed with the magistrate
and did reach the correct conclusion on the merits. Therefore, we can affirm the judgment, since the error was not
prejudicial. citing .
*8 {¶ 42} As a final matter, we note that Craftsmen has made a somewhat convoluted argument about “” and the
fact that the parties had “agreed” that no goods were exchanged under the contract. First of all, there is no
D. Partial Performance
*8 {¶ 44} Craftsmen's final sub-argument is that where an unsigned lease exists, possession of premises and
payment of rent are still not enough to establish partial performance of a lease. In support of this position,
Craftsmen relies primarily on and . Both of these cases deal with partial performance and the statute of
conveyances.
Statute of Frauds in . Nonetheless, even if were applicable, the requirements for the partial performance
exception would have been satisfied.
*8 {¶ 47} As a general matter, agreements may be removed from the operation of the Statute of Frauds by partial
performance “only where the party relying on the agreement changes his position to his detriment, thereby
making it impractical or impossible to return the parties to their original status.” . Where contracts for real estate
return the parties to their original status.
*9 {¶ 49} In reviewing the evidence, it is clear that Fox changed his position to his detriment and that returning the
parties to their original status would have been impractical or impossible. Fox's actions were also exclusively
referable to the agreement and the performance cannot be accounted for in any other manner than having been
done in pursuance of the agreement. at paragraph three of the syllabus.
relying detrimentally on the fact that Craftsmen had agreed to buy the assets of Better Kitchen. Accordingly, we
reject the claim that the requirements for partial performance were not satisfied.
*9 {¶ 51} As we have stressed, and the traditional partial performance exception to the Statute of Frauds do not
apply to this case. However, even if they did apply, the exception was satisfied.
*9 {¶ 52} Because all the sub-arguments are without merit, the first argument is overruled.
transaction to be in two separate documents. Readnower also did not agree to the terms.
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*9 {¶ 54} Both the magistrate and trial court found that the terms of the above agreements were proposals for
addition to the contract, but did not become part of the contract under because they were rejected. However, the
magistrate and trial court noted that under ,
*10 {¶ 55} “[c]onduct by both parties that recognizes the existence of a contract is sufficient to establish a contract
for sale although the writings of the parties do not otherwise establish a contract. In such case, the terms of the
particular contract consist of those terms on which the writings of the parties agree * * *.”
*10 {¶ 56} The magistrate and trial court found that the situation outlined in precisely fit what had taken place,
and further concluded that the parties' conduct recognized the existence of a contract. Consequently, they found
that the purchase of the displays for $50,000 was enforceable. We agree with these findings. There was
*10 {¶ 58} Based on the preceding discussion, the second argument is without merit and is overruled.
III
*10 {¶ 59} In the third argument, Craftsmen claims that a contract may not be sustained where there is a mutual
mistake on the part of the parties. To support this argument, Craftsmen raises two alleged mutual mistakes. The
first is that the landlord would grant a reasonable lease so that Craftsmen could lease the premises where the
the express or implied consent of the parties. .
*10 {¶ 61} In the present case, Craftsmen did not raise mutual mistake in its answer, nor did it ask to amend the
pleadings after the trial to raise the issue. Therefore, we conclude that the matter has been waived. Craftsmen did
raise mutual mistake in its objections, but only in connection with the lease, not with regard to any encumbrances
on the displays. Assuming for the sake of argument that the matter was sufficiently raised in connection with the
Craftsmen a reasonable lease. As we stressed earlier, the lease was not even mentioned in the documents that
were exchanged. This contradicts Craftsmen's claim that the lease was critical. In addition, Fox testified that no
one ever stated that the deal was contingent upon Craftsmen getting a lease with the landlord, thereby indicating
that if a mistake existed, it was not mutual. Accordingly, even if we considered the defense of mutual mistake, we
would find it without merit.
indicated that he intended to pay off the liens with the sale proceeds. And finally, we note Readnower's testimony
that the issue of liens did not arise until after Fox received the Bill of Sale and Covenant Not to Compete.
Because the magistrate found that the Bill of Sale and Covenant were generated after the parties reached
agreement, the presence of any liens could not have been a mutual mistake about a basic assumption at the time
the contract was formed.
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apparent authority to bind Craftsmen on the contract. Although the magistrate and trial court found that
Readnower had apparent authority, Craftsmen contends that Readnower's acts alone could not establish
(2) that the person dealing with the agent knew of those facts and acting in good faith had reason to believe and
did believe that the agent possessed the necessary authority.” Id. at syllabus.
*12 {¶ 69} In Master Consolidated, the court went on to clarify the relationship between estoppel and apparent
authority. Specifically, the court said that the two concepts:
*12 {¶ 70} “ ‘are similar in that they are based on the underlying principle that a person shall be bound by his
quoting from 1 Ohio Jury Instructions (1990) 200, Section 15.10.
*12 {¶ 71} Some courts have held that agency by estoppel and apparent authority are equivalent, and are based
on the same elements. See . Regardless of which view is applied, there was sufficient evidence that Craftsmen
held Readnower out as authorized to act for the corporation in this transaction.
*12 {¶ 72} Notably, Readnower was vice-president and treasurer of Craftsmen, and was a 25% stockholder.
displays and to remodel. Under the circumstances, it is clear that Craftsmen clothed Readnower with apparent
authority to act on its behalf.
*12 {¶ 73} Even if we did not find apparent authority, we would conclude that Fox established agency by
estoppel. In the Ohio Supreme Court held that:
*12 {¶ 74} “ ‘[w]here a principle [sic] has, by his voluntary act, placed an agent in such a situation that a person of
*13 {¶ 75} Furthermore, while ratification of an agent's acts is not required, the majority of Craftsmen's
stockholders entered Better Kitchen and exerted control over the displays. A reasonable interpretation of these
actions is that a majority of the stockholders ratified Readnower's authority and agreement to a contract. .
*13 {¶ 76} In light of the preceding discussion, the fourth argument is without merit and is overruled.
V. Damages
reselling and recovering damages under , recovering for non-acceptance under , or recovering the price under .
The official comment to stresses that sellers are not required to elect a remedy and that the remedies are
cumulative in nature. In the present case, the recovery Fox obtained fits within “non-acceptance” under . This
section provides that: “(A) Subject to division (B) of this section and to the provisions of with respect to proof of
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the market price at the time and place for tender and the unpaid contract price together with any incidental
damages provided in , but less expenses saved in consequence of the buyer's breach.
*13 {¶ 79} “(B) If the measure of damages provided in division (A) of this section is inadequate to put the seller in
as good a position as performance would have done then the measure of damages is the profit, including
reasonable overhead, which the seller would have made from full performance by the buyer, together with any
the contract been performed.” ’ (citation omitted). It is also consistent with the general philosophy of the Uniform
Commercial Code that the remedies provided “shall be liberally administered to the end that the aggrieved party
may be put in as good a position as if the other party had fully performed.” .
*14 {¶ 81} As we mentioned, Craftsmen claims that the evidence about damages was speculative. Again, we
disagree. Both sides assigned a value of $50,000 to the displays. While Readnower testified that the displays
point was substantiated by a witness, who saw Fox and a former partner breaking up the contents of the
showroom and throwing displays in a large rollout dumpster during February, 1999. This was around the time the
lessor required Fox to vacate the premises. Fox told this witness at the time that he was throwing the goods away
because he had nowhere to store the items. There was also testimony from witnesses who corroborated the sale
of various items on the list.
of the record. We note that there were contradictions in the testimony of various witnesses, including Craftsmen
stockholders, as to a number of matters. This is not surprising, since nearly five years elapsed between the sale
and the time of trial. Both sides also kept rather poor documentation. The magistrate clearly found Fox more
credible, by accepting Fox's testimony as to the amount of goods he was able to sell.
*14 {¶ 85} We have stressed many times that credibility decisions belong to the trier of fact, which has the best
Craftsmen had breached the contract by not paying any of the $50,000 that was owed. The court also adopted
the magistrate's decision and entered judgment in Fox's favor in the amount of $41,262.32, which is the amount
found by the magistrate after deducting what Fox received for the goods he was able to sell. However, the trial
court did not specifically include a sentence stating that it was overruling the damage objection.
*15 {¶ 87} Although the issue is close, we find that remand is not required under the circumstances of this case,
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if only by implication. Id. at ¶ 13. We concluded that despite this fact, we were required to dismiss the case
because the court's journal entry failed to adopt the magistrate's decision, which was required by . Id. at ¶ 14-18.
In contrast to McCain, the trial court in the present case did adopt the magistrate's decision when it entered
judgment. Accordingly, we need not dismiss the appeal, nor must we remand the case. However, in the future,
the better practice for the court would be to explicitly state that all objections have been overruled.
*15 {¶ 89} Based on the preceding discussion, the fifth argument is without merit and is overruled.
VI. Ownership of the property
*15 {¶ 90} In its final argument, Craftsmen contends that Fox and Better Kitchen did not own the assets and had
nothing to sell, because Fox had taken out a loan with KeyBank that was secured by the assets that were being
sold. In our opinion, this is a non-issue.
*16 {¶ 92} Readnower's Bill of Sale states that:
*16 {¶ 93} “SELLERS warrants [sic] that there are no liens or encumbrances on the goods sold, and that
SELLERS' title to the goods is clear and merchantable. SELLERS shall also defend BUYERS from any adverse
claims to SELLERS' title to the goods sold.”
*16 {¶ 94} The subsequent purchase agreement that Fox submitted to Craftsmen stated that:
agreement, Fox's proposal was materially different from the provision in the Bill of Sale. Specifically, Fox's clause
indicates that title to the goods would be relinquished at the term (presumably the termination) of the purchase
agreement-which was scheduled to last for three years. Fox's proposal also materially differed from the Bill of
Sale because it omitted the “duty to defend.”
*16 {¶ 98} The magistrate did not discuss the proposals for liens and encumbrances in detail, beyond noting that
objection. If the trial court felt that the oral agreement was unenforceable, it would not have found a breach, would
not have adopted the decision of the magistrate, and would not have awarded judgment in the amount of
$41,262.32.
*16 {¶ 99} As a further matter, Craftsmen's breach of the agreement made the issue of liens or encumbrances
irrelevant. In view of Craftsmen's repudiation or non-acceptance, whether KeyBank or any other entity had an
*17 {¶ 100} Based on the above discussion, the sixth argument is without merit and is overruled.
*17 {¶ 101} Because all the arguments or assignments of error have been overruled, the judgment of the trial
court is affirmed.
