COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 70632 AMI EVEN, ET AL., : : Plaintiffs-Appellants : Cross-Appellees : : JOURNAL ENTRY vs. : and : OPINION H. MICHAEL KRAWITZ, ET AL., : : Defendants-Appellees : Cross-Appellants : DATE OF ANNOUNCEMENT OF DECISION : MAY 1, 1997 CHARACTER OF PROCEEDING : Civil appeal from : Common Pleas Court : Case No. 287641 JUDGMENT : REVERSED AND REMANDED. : DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiffs-appellants/ Alan I. Goodman cross-appellees: 620 Terminal Tower Cleveland, Ohio 44113 For defendants-appellees/ Kevin H. Young cross-appellants: MARTINDALE & BRZYTWA 900 Skylight Office Tower 1660 W. 2nd Street Cleveland, Ohio 44113-1411 Samuel A. Abady Susan D. Bainnson ABADY, LUTTATI, KAISER, SAURBORN & MAIR 666 Third Avenue, 29th Floor New York, New York 10017 -3- NAHRA, P.J.: This cause is heard on Ami Even and Paula Cohen's, appellants, appeal of the grant of summary judgment in favor of H. Michael Krawitz and Josephine R. Abady, appellees, in appellants' action for damages resulting from the sale of a house by appellees to appellants in Cleveland Heights, Ohio. In May, 1994, appellees sold their residence to appellants and moved to New York. Prior to the sale, the home was inspected by the City of Cleveland Heights and by appellants. As required by R.C. 5302.30, appellees completed a property disclosure form in which they stated they knew of no defects in the plumbing and were unaware of any material defects in the house. After appellants moved into the home, they discovered water damage in the master bathroom requiring approximately $6500 of repairs. The damage was caused by water leaking from the shower in the master bathroom, a condition which had existed for a substantial period of time. Appellants sued appellees, asking to be reimbursed for the repairs made as a result of the water damage due to appellees' nondisclosure of the condition causing the damage in the master bathroom. Appellees defended the action by challenging the court's jurisdiction and by stating that they had no knowledge of the water damage or its cause. The court found that it had personal jurisdiction over appellees and that appellees were entitled to summary judgment -4- because appellants had not demonstrated that appellees had knowledge of the damage within the home. Appellants appeal the grant of summary judgment. Appellees have cross-appealed, complaining that the court erred by exercising personal jurisdiction over them. I. As it addresses whether the court has jurisdiction over appellees, we find it necessary to first review appellees' cross- appeal. Appellees list the following assignments of error: I. THE LOWER COURT ERRED BY FINDING SUFFICIENT MINIMUM CONTACTS TO ASSERT LONG ARM JURISDICTION OVER DEFENDANT- CROSS APPELLANTS WHERE DEFENDANTS WERE RESIDENTS OF NEW YORK AND NOT TRANSACTING BUSINESS IN OHIO. II. THE LOWER COURT ERRED BY FINDING THAT ASSERTING PERSONAL JURISDICTION OVER THE DEFENDANT-CROSS- APPELLANTS SATISFIES FOURTEENTH AMENDMENT REQUIREMENTS OF DUE PROCESS. These assignments of error are closely related and will be addressed together. Appellees argue that they are residents of the state of New York and not subject to personal jurisdiction of the court because they were not transacting business in Ohio for the purpose of Ohio's long-arm jurisdiction statute, R.C. 2307.382, and further, that by asserting personal jurisdiction over appellees, the court violated their rights to due process of law as guaranteed by the fourteenth amendment to the U.S. Constitution. Appellants argue that appellees transacted business within the meaning of R.C. 2307.382 and are subject to the jurisdiction of Ohio courts. Additionally, appellants argue that the assertion of jurisdiction over appellees does not offend the fourteenth -5- amendment because 1) appellees had the requisite minimum contacts in Ohio and 2) the maintenance of jurisdiction over appellees in no way offends traditional notions of fair play and substantial justice. Ohio courts may exercise personal jurisdiction over non- residents who satisfy the requirements set forth in Ohio's long- arm jurisdiction statute, R.C. 2307.382. R.C. 2307.382(A) provides in part that: (A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's: (1) Transacting any business in this state; *** (3) Causing tortious injury by an act or omission in this state. *** In the syllabus of Kentucky Oaks Mall Co. v. Mitchell's Formal Wear, Inc. (1990), 53 Ohio St.3d 73, 559 N.E.2d 477, the Ohio Supreme Court determined that the plain meaning of the phrase "transacting any business" in R.C. 2307.382(A)(1) is to be applied to determine when personal jurisdiction is appropriate for a non- resident defendant. Clearly, the sale of a house falls within the broad language in R.C. 2307.382(A)(1) of "transacting any business in this state." The parties only ask this court to determine whether the sale of a home in Ohio is transacting business under R.C. 2307.382, however, we note that appellants have alleged a tortious action, -6- fraudulent non-disclosure, and R.C. 2307.382(A)(3) additionally provides for personal jurisdiction over persons who commit torts within Ohio. As appellants' action is one for recovery for a tortious act, Ohio's long-arm jurisdiction statute further provides jurisdiction. Once the personal jurisdiction statute is satisfied, however, a state may only assert personal jurisdiction over non-resident defendants where the exercise of that jurisdiction is in accord with the due process clause of the fourteenth amendment of the United States Constitution. Kentucky Oaks Mall, 53 Ohio St.3d at 76; 559 N.E.2d at 480. The United States Supreme Court has stated that the fourteenth amendment is satisfied where the non-resident defendant has minimum contacts with the forum state and when the maintenance of personal jurisdiction does not offend the "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington (1945), 326 U.S. 310, 316 (citations omitted). In Kentucky Oaks Mall, the Ohio Supreme Court examined what constitutes the requisite minimum contacts in order that a non- resident defendant is subject to suit in Ohio courts. The court, relying upon both International Shoe, supra, and Burger King Corp. v. Rudzewicz (1985), 471 U.S. 462, noted that some of the factors that establish minimum contacts include determining whether the non-resident had purposefully established minimum contacts in Ohio, as well as looking to: -7- `the burden on the defendant,' `the forum state's interest in adjudicating the dispute,' `the plaintiff's interest in obtaining convenient and effective relief,' `the interstate judicial system's interest in obtaining the most efficient resolution of controversies,' and the `shared interest of the several states in furthering fundamental substantive social policies.' *** These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required. *** On the other hand, where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable. Kentucky Oaks Mall, 53 Ohio St.3d at 77, 559 N.E.2d at 481 (quoting Burger King Corp. v. Rudzewicz (1985), 471 U.S. 462, 476-77) (citations omitted). Here, appellees entered into a contract for the sale of a house. In connection with the sale, appellees submitted a property disclosure form. By entering into a contract for the sale of real property within Ohio, the parties to that contract have established the minimal contacts necessary to assert personal jurisdiction. Both parties could avail themselves of the protection afforded by Ohio courts to enforce that contract in case of breach; the law to be applied is that of Ohio; and Ohio has an interest in determining and enforcing its regulations concerning the sale of residential property. Accordingly, the exercise of personal jurisdiction over appellees in no way offends the traditional notions of fair play and substantial justice and satisfies the requirements of the due process clause of the fourteenth amendment. -8- We find the court properly exercised personal jurisdiction over appellees for the reasons stated. Appellee's assignments of error in their cross-appeal are not well taken. II. Appellants have one assignment of error: THE TRIAL COURT ERRED WHEN IT GRANTED THE MOTION OF THE APPELLEES FOR SUMMARY JUDGMENT WHEN THEY WERE NOT ENTITLED TO A JUDGMENT AS A MATTER OF LAW SINCE THERE EXISTED GENUINE ISSUES OF MATERIAL FACT. A grant of summary judgment is to be reviewed de novo. Brown v. Bd. of Comm'rs. (1993), 87 Ohio App.3d 704, 711, 622 N.E.2d 1153, 1158. A court may grant a motion for summary judgment when it determines that: (1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and in viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party. Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327; 364 N.E.2d 267, 274. Appellants allege in their complaint that appellees have committed the tort of fraudulent nondisclosure by failing to inform them of the water damage and its cause in the master bathroom. To maintain a cause of action for fraudulent nondisclosure, appellants must demonstrate that there was: (1) an actual concealment (2) of a material fact (3) with knowledge of the fact concealed (4) with intent to mislead another into relying upon such conduct (5) followed by actual reliance thereon by such other person -9- having the right to so rely (6) with injury resulting to such person because of such reliance. Arbor Village Condo Ass'n. v. Arbor Village Ltd., L.P. (1994), 95 Ohio App.3d 499, 510, 624 N.E.2d 1124, 1131 (quoting Crum v. McCoy (1974), 41 Ohio Misc. 34, 39, 322 N.E.2d 161, 165). Appellants have presented evidence that they relied upon the property disclosure form required by R.C. 5302.30 and that soon after they moved into the house they discovered a defect in the home which required repairs. Appellants have also presented evidence that the condition causing the damage existed for a substantial amount of time, demonstrating that the damage to the home was caused because the shower sill caused water to leak from the shower onto, and then into, the floor of the master bathroom. They allege that the water damage and its cause had been concealed by the sealing in the bathroom. Appellees have stated by affidavit that they had no knowledge of any water damage or defects in the master bathroom and that the sealing in the bathroom was done by them in 1988 as preventive maintenance. Additionally, appellees note that neither appellants nor the City of Cleveland Heights' housing inspector found any water leakage or damage in the master bathroom. From this evidence, it is apparent that the issue to determine is whether appellees knew of and concealed the water leakage in the bathroom by sealing the floor in the bathroom and/or failing to disclose the leaking water in the bathroom within the property disclosure form. -10- Appellants have presented evidence that the condition causing the damage existed while appellees owned the home, that there had been sealing in place which concealed the cause of the damage upon their inspection of the home, and that the property disclosure form contained no information regarding the water leak from the shower or the water damage. Moreover, the water seepage was discovered soon after appellants moved into the house. Appellants' evidence creates a reasonable inference that appellees knew of the water seepage in the bathroom. Since the water seepage and damage were discovered soon after the appellants moved into the home and since the condition causing the water damage had existed for a long time, reasonable minds could conclude appellees were aware of the problem. Appellees have merely denied the appellants' charges by affidavit. This is not conclusive evidence. Appellees' statements are contradicted by appellants' evidence creating a material issue of genuine fact as to what appellees knew at the time of the sale which precludes summary judgment. See, Aglinski v. Cleveland Builders Supply Co. (1990), 68 Ohio App.3d 810, 815, 589 N.E.2d 1365, 1369 ("A genuine issue as to material fact exists whenever the relevant factual allegations in the pleadings, affidavits, depositions or interrogatories are in conflict.") (Citations omitted.) The credibility of appellees' testimony may be determinative of the issues and such "issues of credibility of affiants are not issues properly decided or disposed of by a motion for summary -11- judgment." Aglinski, 68 Ohio App.3d at 817, 589 N.E.2d at 1369 (citing Sartor v. Arkansas Natural Gas Corp. (1944), 321 U.S. 620, 64 S.Ct. 724; Duke v. Sanymetal Products Co. (1972), 31 Ohio App.2d 78, 81, 286 N.E.2d 324, 327; Covitt v. Bass Chevrolet, Inc. (June 29, 1989), Cuyahoga App. No. 55515, unreported, at 6). For these reasons, the grant of summary judgment to appellees was in error. Appellants' assignment of error is well taken. We reverse the grant of summary judgment and remand this cause for further proceedings. -12- This cause is reversed and remanded for proceedings consistent with this opinion. It is, therefore, considered that said plaintiffs- appellants/cross-appellees recover of said defendants- appellees/cross-appellants their costs herein. 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. SPELLACY, J., CONCURS. KARPINSKI, J., CONCURS IN PART AND DISSENTS JOSEPH J. NAHRA IN PART. (See attached PRESIDING JUDGE Concurring and Dissent- ing Opinion.) 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). COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 70632 : AMI EVEN, ET AL., : : : CONCURRING Plaintiffs-Appellants : Cross-Appellees : AND v. : : DISSENTING H. MICHAEL KRAWITZ, ET AL., : : OPINION : Defendants-Appellees : Cross-Appellants : : DATE OF ANNOUNCEMENT OF DECISION: MAY 1, 1997 KARPINSKI, J., CONCURRING IN PART AND DISSENTING IN PART: I concur with the majority in regard to the cross-appeal, but respectfully dissent as to the sole assignment of error on appeal challenging the trial court's order granting summary judgment. For appellants to succeed, they must prove fraudulent concealment and actual knowledge of the latent defect. I do not believe it is reasonable to infer such conclusions from the evidence presented. Buyers admit that the water seepage was not visible to the naked eye because the corners of the floor had been sealed. It is undisputed that when sellers first moved into the house in 1988 the - 2 - 1/ shower was regrouted as a preventive measure. (Defendants' Affidavit in Support of Their Motion for Summary Judgment, p. 7.) Sellers also maintain they regularly cleaned the grout to prevent mildew. There is nothing in the record to indicate sellers regrouted after 1988. Thus there is no evidence that sellers concealed a problem. Regrouting six years before a house is sold cannot be used to prove intent to conceal. Sellers admit they regularly cleaned the grout. Cleaning mildew, however, even cleaning mildew on grout in a shower area, is normal maintenance even from bathrooms that have no leaks. Evidence of maintenance does not support a reasonable inference of actual knowledge of a latent defect or of intent to conceal. Nor does the letter from the buyers' worker who repaired the floor provide this basis. Although the worker opines that the leak had occurred for a long time, he never specifies whether the leak was visible either at the time of sale or before. Further, the worker noted that the problem was the height of the shower curb and the shower pan; water was leaking from the door onto the marble floor. First, the height of the shower curb and pan is not a latent defect; it is visible to the naked eye, especially to the trained eye of an engineer with the experience in home repair that buyer claims. Second, the worker noted a spot on the ceiling below the bathroom. No one claims, however, that any problems in the ceiling were present and concealed at the time of sale. Had such a 1/ At oral argument buyers disputed that such an assertion was in the record, but it is clearly there in an attachment to Seller's Motion for Summary Judgment. - 3 - spot been visible to the sellers, it also would have been visible to the buyers. The worker also opined that the leak was of long duration. It is not reasonable, however, to infer that sellers had knowledge of a leak simply because subsequent prying behind tile and under a marble floor revealed a leak of long duration. There must be more than that to show actual knowledge. Nor is mildew indicative of a leak. If it were, judging from the sale of anti-mildew products, we must conclude the entire country is leaking. Because I see no conflict in facts, because I do not agree that an inference of actual knowledge was reasonable based on the .