COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NOS. 70286, 70287 PROGRESS PROPERTIES, INC. : : Plaintiff-Appellee : : JOURNAL ENTRY v. : AND : OPINION JACK T. BAIRD, ET AL. (70286), and : RICHARD C. PATTERSON, ET AL. : (70287) : Defendants-Appellants : DATE OF ANNOUNCEMENT OF DECISION: OCTOBER 23, 1997 CHARACTER OF PROCEEDING: Civil appeals from Common Pleas Court, Case No. CV-271721 JUDGMENT: Reversed. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: For Defendants-Appellants: STEWART S. WILSON, ESQ. MICHAEL T. GAVIN, ESQ. NICHOLAS E. PHILLIPS, ESQ. ANTHONY J. COYNE, ESQ. PHILLIPS & MILLE CO. ELI MANOS, ESQ. 7530 Lucerne Drive MANSOUR, GAVIN, GERLACK Suite 200 & MANOS Middleburg Heights, Ohio 44130 2150 Illuminating Building 55 Public Square Cleveland, Ohio 44113-1994 JOSHUA J. KANCELBAUM, ESQ. PAUL P. PSOTA, ESQ. 8228 Mayfield Road ALAN G. STARKOFF, ESQ. Suite 6B GAINES & STERN CO., L.P.A. Chesterland, Ohio 44026 1400 Renaissance Center 1350 Euclid Avenue Cleveland Ohio 44115-1817 2 KARPINSKI, J.: Defendants-appellants Jack T. Baird and Richard C. Patterson from the judgment of the trial court which grante Progress Properties' complaint for specifiand defendant-ap performance. Progress sought specific performance of a right of first refusal to purchase property located at 1240 Carnegie Avenue in Cleveland, Ohio. Progress, which is located in the same area of downtown Cleveland, had leased the parking spaces on the property from Baird and Patterson. The right of first refusal was found in the lease. Baird and Patterson had agreed to sell the property to Maloof. In bringing the action for specific performance1, Progress sought to enforce the right of first refusal and, therefore, purchase the property instead of Maloof. Because the contract did not contain the level of certainty and definiteness required for specific performance, the judgment of the trial court is reversed. The relevant facts follow. The property in question, 1240 Carnegie Avenue, was purchased by Baird and Patterson in March, 1977. Located on the property is a warehouse/office building containing 20,064 square feet of space 1 Plaintiff's complaint sought the remedy of specific performance only. Furthermore, the complaint stated in paragraph 4 as follows: Unless this Court orders specific performance by Defendants Jack T. Baird and Richard C. Patterson of the contract attached hereto as Exhibit A, Plaintiff will suffer irreparable harm for which it has no adequate remedy at law, by reason of its loss of the opportunity to purchase a unique parcel of real property. 3 and abutting parking areas. At the time Progress signed the lease, Graphic Associates Inc., a printing supply company owned by Patterson, had occupied this building since 1977. Between 1992 and 1994, Progress expressed its interest in buying the Baird and Patterson property and made two offers of $525,000 and later $580,000. Baird and Patterson rejected both offers. When the new professional baseball stadium, Jacobs Field, opened nearby, Progress began to develop the business of providing special event parking for the games. On April 1, 1994, Baird and Patterson entered into a one-year lease with Progress: Progress would operate the business of providing parking for the baseball spectators. Progress was aware of a separate lease between the owners and Graphic Associates for the use of the buildings and parking during the day. The parking lease, drafted by the president of Progress and modeled after a standard parking lease, stated as follows: 1. PREMISES. Landlord demises and leases to Tenant for the term and upon the covenants, agreements, and conditions set forth herein, said real estate, abutting Landlord's property on Webster Avenue and East 13th Street and Gardiner Court, together with improvements thereon and with all appurtenance thereto, including, but limited to, the right of ingress and egress by motor vehicles and pedestrians to and from the premises, but excluding therefrom all off-site improvements. Said real estate, together with all improvements and all appurtenance, shall hereinafter be referred to as the leased premises , and is all that certain parcel of land situated in the City of Cleveland, County of Cuyahoga, State of Ohio, permanent parcel numbers 122-02-001,-002,- 003,-004,-005,-006,-007,-088,-034, commonly described as the property located parking along East 13th Street, from Carnegie to Gardiner Court; all parking company's business lot on East 13th Street; all parking on East 4 13th Street and in Gardiner court; and rear lot off Gardiner Court of 5,000 sq. Ft. and more fully described in Exhibit A which is attached hereto and made a part thereof, as well as Gardiner Court, abutting premises for Special Event Parking . * * * 3. USE. The leased premises shall be used by Tenant as either an attended or unattended parking and storage facility for motor vehicles and for such other purpose or purposes as may be incidental thereto, during Special Event times in agreement with Landlord's use. Tenant covenants and agrees that it will not use, or suffer or permit any person to the leased premises for any purpose or use in violation of any federal, state or local law or ordinance of any governmental body having jurisdiction over the leased premises. * * * 16. RIGHT OF FIRST REFUSAL. If the Landlord offers or receives a bona fide offer for the sale, lease, or management of the leased premises for a term subsequent to the term herein provided, or any extension thereof at a price and upon terms acceptable to the Landlord, Tenant shall have the right of first refusal of all offers. Landlord shall immediately notify the Tenant of any such offer by sending a true copy of the offer by certified mail addressed to Tenant as provided herein, and Tenant shall have thirty (30) days from receipt of such notice to advise Landlord of its intention to accept or reject the offer. The term of this lease was one year with the option to be extended. In consideration of this lease, Progress paid rent based on the number of vehicles parked in the spaces. On May 17, 1995, Alan Starkoff, Trustee,2 made an offer of $725,000 for the property. The owners communicated to Progress that this offer had been made and stated they would counteroffer to Starkoff to sell the property for $850,000. Progress responded it would offer $800,000 for the property and save the owners the cost 2 Starkoff entered into a trust agreement with Maloof whereby Starkoff was authorized to submit offers to purchase real estate on behalf of Maloof. 5 of the broker's commission. The Starkoff offer expired on May 26, 1995. On May 26, 1995, the owners counteroffered to sell to Starkoff for $875,000. On May 27, 1995, Progress made an offer of $800,000 with financing contingencies. During these negotiations, Progress never mentioned a right of first refusal. A right of first refusal was not mentioned until May 31, 1995, when the owners told Progress that Starkoff had accepted the counter offer of $875,000. On June 1, 1994, the owners entered into an agreement to sell the property for $875,000 to Alan G. Starkoff, Trustee. One week later, on June 8, 1994, Progress wrote it intended to invoke its right of first refusal. After the deal was closed, Starkoff assigned the deed to Maloof & Maloof on October 25, 1994. Progress filed a complaint seeking specific performance of the right of first refusal. Progress argued that the owners breached the lease agreement by signing a purchase agreement with Starkoff without affording Progress the opportunity to exercise its right of first refusal. The trial court overruled separate motions for summary judgment filed by Maloof and the owners. After a bench trial the court determined that the right of first refusal was negotiated by the parties and that it applied to the entire parcel and not just to the parking spaces. The court also found that the contract was valid and enforceable and that Progress was entitled to specific performance. In its memorandum to counsel, the trial court stated as follows: The Owners further contend that the contract is unenforceable and ambiguous with respect to what property 6 it was that the plaintiff was granted the right of first refusal to purchase by Item 16. The Court holds that the contract is not ambiguous nor is it ambiguous specifically with respect to the plaintiff's right of first refusal; that the property which is the subject matter of the right of first refusal was all of the sublots stated in the lease-contract and in the complaint, including the commercial building on them. (Memorandum to Counsel at page 7.) Both Baird and Patterson and Maloof and Maloof timely appealed, Maloof raising five assignments of error and Baird and Patterson raising seven assignments of error. Because they are dispositive to the case at bar, we will address the fourth assignments of Maloof & Maloof and Baird and Patterson.3 Maloof's fourth assignment of error states as follows: THE TRIAL COURT ERRED IN ORDERING CONVEYANCE OF THE SUBJECT PROPERTY TO PLAINTIFF THROUGH ITS DECREE OF SPECIFIC PERFORMANCE. Baird and Patterson's fourth assignment of error states as follows: THE RIGHT OF FIRST REFUSAL WAS TOO INDEFINITE TO SUPPORT THE EQUITABLE REMEDY OF SPECIFIC PERFORMANCE. In these assignments of error, both appellants argue that the lease was not definite enough to support an award of specific performance. Specific performance is an equitable remedy. Oglebay Norton Co. V. Armco, Inc. (1990), 52 Ohio St.3d 232, 237. The Second Restatement of Contracts specifies unequivocally the following condition: 3 The parties' remaining assignments of error are attached in the appendix to this journal entry and opinion. 7 Specific performance or an injunction will not be granted unless the terms of the contract are sufficiently certain to provide for an appropriate order. Restatement of the Law 2d, Contracts (1979), 179 Effect of Uncertainty of Terms, Section 262. In other words, in order to order specific performance of a contract, [t]he contract itself must make the precise act which is to be done clearly ascertainable. It is fundamental that in order to do this and to enable the court to decree specific performance, the terms of the contract must be clear, definite, certain, and complete. The contract must be free from doubt, vagueness, and ambiguity, so as to leave nothing to conjecture or to be supplied by the court. It must be sufficiently certain and definite in its terms to leave no reasonable doubt as to what the parties intended, and no reasonable doubt of the specific thing equity is called upon to have performed, and it must be sufficiently certain as to its terms so that the court may enforce it as actually made by the parties. 71 American Jurisprudence 2d (1973), Specific Performance, Section 30. This requirement that a contract must be sufficiently definite and certain before being specifically enforced has also been applied to real estate purchase options. 3 Friedman on Leases (1997), Section 15.101 at 951. Ohio courts have consistently followed this rule and held that courts should not specifically enforce a contract that is uncertain. Mr. Mark Corporation v. Rush, Inc. (1983), 11 Ohio App.3d 167; Beidler v. Davis (1943), 72 Ohio App. 27. In the case of an attempt to specifically enforce a real estate contract, the Ohio Supreme Court has held that parole evidence may not be admitted to furnish or correct a description of the property. Schmidt v. Weston (1948), 150 Ohio St. 293. 8 In the case at bar, the trial court held that the contract was unambiguous. We do not agree. The question of whether a contract is ambiguous is a question of law to which this court applies a de novo standard of review. Ohio Historical Society v. General Maintenance & Engineering Co. (1989), 65 Ohio App.3d 139; Seringetti Constr. Co. v. Cincinnati (1988), 51 Ohio App.3d 1. A contract is ambiguous if it is susceptible to more that one reasonable interpretation. Hillsboro v. Fraternal Order of Police, Ohio Labor Council, Inc. (1990), 52 Ohio St.3d 174, 177. The lease in the case at bar is susceptible to more that one interpretation. The language is not sufficiently definite and certain regarding whether the lease covers just the parking spaces or the entire property. The first paragraph, which defines the leased premises, states, Landlord demises and leases to Tenant *** said real estate abutting Landlord's property on Webster Avenue and East 13th Street and Gardiner Court, together with improvements thereon and with all appurtenance thereto ***. The word abutting modifies said real estate and hence implies that what is covered by the lease is the land abutting the property, and not the building. The phrase, together with improvements thereon and appurtenance thereto does not clarify the issue because it is not clear whether this phrase refers to said real estate or only the real estate, abutting the property. The second paragraph describing the premises is unclear as well. It states in part: Said real estate, together with all improvements and appurtenance, shall hereinafter be referred to as 9 the `leased premises,' and is all that certain parcel of land *** permanent parcel numbers ***, commonly described as the property located parking ***. Again, while the sentence begins with broad language and actually lists the parcel numbers, it ends with a description of only parking areas. The phrase property located parking 4can be read to mean only the property on which parking is located. At the end of a list of permanent parcel numbers and the locations of the parking spaces is the phrase and more fully described in Exhibit A, which is incorporated into the contract. This exhibit roughly indicates the location and number of parking spaces. The only name for the document, other than Exhibit A, appears to be 56 PARKING SPACES. It appears that what the exhibit more fully described is parking. In this exhibit there is no reference to any building on the property. It is clear from both the language of the lease and the exhibit that the leased premises do not include any buildings. The final phrase of this one-sentence paragraph is abutting premises for `Special Event Parking.' It is unclear whether this phrase refers to all that precedes, that is, that certain parcel of land or just to the word immediately preceding, that is, Gardiner Court. It seems inconsistent, however, that the phrase restrict only Gardiner Court, which was previously restricted by the words parking on and rear lot off. On the contrary, the 4 This phrase is unclear grammatically as well. 10 phrase abutting premises for `Special Event Parking' appears to be limiting the property in the lease. The third paragraph, which specifies how the leased premises are to be used, refers only to parking and storing of motor vehicles during special events. This section of the lease is clear. From reading the four corners of the lease this court concludes that the contract is, at best, ambiguous. The language of the lease can reasonably be interpreted to cover either the entire parcel or merely the area on which parking spaces are leased. The ambiguity and lack of certainty within the four corners of this lease make impossible the remedy of specific performance. The trial court's award of specific performance, therefore, was in error. Judgment reversed. 11 This cause is reversed. It is, therefore, ordered that appellants recover of appellee their costs herein taxed. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. BLACKMON, P.J., CONCURS; DYKE, J., CONCURS IN JUDGMENT ONLY. DIANE KARPINSKI JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also, S.Ct.Prac.R. II, Section 2(A)(1). 12 Appendix Remaining Assignments of Error, Maloof & Maloof I. The trial court erred in ordering the Defendant Maloof & Maloof Limited Liability Company to convey by quit claim deed all its right, title and interest in the subject property to the Plaintiff, in that the law of Ohio grants to Maloof & Maloof Limited Liability Company a right superior to the Plaintiff in the subject property. II. The trial court erred in finding that Alan G. Starkoff and Maloof & Maloof Limited Liability Company had notice of Plaintiff's right of first refusal. III. The trial court erred in construing the parking lease prepared by Harvey J. Schach to provide a preemptive right to Plaintiff to match the price to purchase the entire subject property, in that the plain language of the lease does not support the construction adopted by the trial court. *** . The judgment of the trial court was contrary to the manifest weight of the evidence. Remaining Assignments of Error, Baird and Patterson I. THE TRIAL COURT'S DECISION BELOW RESTS LARGELY ON QUESTIONS OF LAW WHICH ARE REVIEWABLE BY THIS COURT UNDER A DE NOVO STANDARD OF REVIEW. I. THE TRIAL COURT'S CONCLUSION THAT THE PROPERTY DESCRIBED IN THE CONTRACT INCLUDED ALL OF THE PARCELS INCLUDING THE BUILDING WAS ERRONEOUS. I. A COMMON ENGLISH INTERPRETATION OF THE RIGHT OF FIRST REFUSAL CLAUSE COMPELS CONCLUSION THAT IT DOES NOT APPLY TO PURCHASE OFFERS RECEIVED DURING THE INITIAL TERM. *** V. THE NOTICE AND CURE PROVISIONS OF THE DEFAULT CLAUSE IN THE PARKING LEASE HAVE NOTHING TO DO WITH PROGRESS'S OBLIGATION TO BE IN GOOD STANDING UNDER THE LEASE AT THE TIME OF 13 PURPORTED EXERCISE OF THE RIGHT OF FIRST REFUSAL. VI. THE LIS PENDENS STATUTE DOES NOT RENDER MALOOF'S INTEREST VOID. .