COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 70673 JOHN G. LAMB : : JOURNAL ENTRY Plaintiff-Appellant/: Cross-Appellee : AND vs. : : OPINION JOSEPH A. CARVER, ET AL. : : [Smythe, Cramer Company, : : Defendant-Appellee/ : Cross-Appellant] : DATE OF ANNOUNCEMENT OF DECISION: MAY 15, 1997 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. CV-220240 JUDGMENT: AFFIRMED IN PART, REVERSED IN PART AND REMANDED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: ANTHONY J. HARTMAN JAY H. SALAMON Hermann, Cahn & Schneider 1301 East Ninth Street, Suite 500 Cleveland, Ohio 44114 DANIEL G. MORRIS 950 Standard Building 1370 Ontario Street Cleveland, Ohio 44113 FORD L. NOBLE 6000 Lombardo Center, Suite 120 Seven Hills, Ohio 44131 For Defendant-Appellee: GEORGE S. COAKLEY ANDREW A. KABAT Reminger & Reminger 113 St. Clair Building Cleveland, Ohio 44114 DAVID R. JONES 5 South Franklin Street Chagrin Falls, Ohio 44022 - 3 - O'DONNELL, J.: John G. Lamb, appeals and Smythe Cramer Realty Company cross-appeals from judgments and rulings made by the trial court on claims arising out of Lamb's purchase of a Moreland Hills home from Joseph and Catherine Carver in which he alleges the Carvers, together with Judith Dietz the listing real estate agent who sold the property, and the Smythe Cramer Realty Company, fraudulently misrepresented and concealed facts about latent defects with the property which induced his purchase of it. Specifically, Lamb contends the court erred in entering judgment notwithstanding the verdict in favor of Smythe Cramer because the pleadings established Dietz as an agent of Smythe Cramer; in directing verdicts in favor of Dietz and Smythe Cramer on the issue of punitive damages; and in entering separate judgments against Dietz and Smythe Cramer. Cross-appellant Smythe Cramer urges the court erred or abused its discretion in permitting Lamb's expert witness, Joseph Petraus, to testify at trial; in denying its motions for a directed verdict and for judgment n.o.v. based upon Petraus' allegedly incompetent testimony on damages; and in letting Lamb express an opinion about the present value of the property, which his counsel used in final argument. The record in this case reflects that Joseph and Catherine Carver owned their home located at 105 Skyline Drive in Moreland - 4 - Hills, Ohio, which is situated on a steep slope overlooking the Chagrin River. In March of 1990, they hired Joseph Petraus, an engineer with EDP Triggs Consultants who, after inspecting the property, delivered a written report to them indicating, inter alia, that the soil was weak from river effects, that the slope was moving, and would continue to be subject to landslides. On March 13, 1990, the Carvers signed an exclusive listing agreement with Judy Dietz of Smythe Cramer Realty as agent for the sale of their home. When the Carvers received Petraus' written inspection report on March 31, 1990, they delivered a copy to Dietz and she prepared sales handout brochures regarding the property which disclosed the inspection and bore the notation, "*** owner will share report. *** verbal comments *** were favorable." In May of that year, John Lamb, his girlfriend, Wendy Gase, and her sister, Laurel Mader, a Delores Knowlton Realty agent, attended an open house at the Carver residence where they obtained one of the sales brochures. They returned the following week and obtained another brochure, but the statement regarding the owner's willingness to share the report had been deleted from it. On June 3, 1990, without having received a copy of the Petraus report, Lamb entered into a purchase agreement for the property at $322,000, and despite subsequent efforts to obtain a copy of the engineering report from Dietz and the Carvers, Lamb eventually closed the sale without it, as Dietz denied having it, and he accepted the - 5 - statements of Dietz and the Carvers regarding the condition of the property. In June, 1991, after a landslide caused substantial property erosion and damaged Lamb's septic system for which the Cuyahoga County Board of Health cited him, Lamb asked his neighbor to contact the Carvers in California seeking referral of a structural engineer. Upon learning the Carvers had recommended EDP Triggs, Lamb called that company and obtained a copy of the 1990 report, which had been prepared by Joe Petraus. Thereafter, Lamb sued the Carvers, Smythe Cramer Realty and Judy Dietz for fraudulently inducing his purchase of the realty. Lamb settled his case against the Carvers prior to trial, but litigated fraudulent misrepresentation claims against both Smythe Cramer and Dietz. At trial, he presented the testimony, inter alia, of Norman Jeavons, Esq., who testified that as an interested purchaser, he attended an open house at the Skyline Drive property, obtained a copy of the engineering study from Judy Dietz, and subsequently decided not to purchase the property because of the contents of the report. Neither defendant offered any testimony at trial. The jury returned compensatory damage verdicts of $60,000 against Smythe Cramer and $90,000 against Judith Dietz, the court having directed a verdict in favor of both defendants on the issue of punitive damages. After journalizing these verdicts, the court granted judgment notwithstanding the verdict in favor of Smythe Cramer finding - 6 - Lamb had failed to establish Dietz as an agent of Smythe Cramer. Lamb has now appealed assigning three errors for our review and Smythe Cramer has cross-appealed raising four assignments of error. We shall first consider Lamb's assignments of error sequentially. The first assignment of error states: I. THE TRIAL COURT ERRED TO PLAINTIFF'S PREJUDICE IN GRANTING THE JNOV TO SMYTHE CRAMER SINCE SMYTHE CRAMER HAD ADMITTED IN ITS ANSWER THAT JUDITH DIETZ WAS ITS AGENT. Here, Lamb asserts that the trial court erred when it entered judgment n.o.v. in favor of Smythe Cramer on the issue of agency because he alleges these parties filed a joint answer which admitted the agency relationship and thereby relieved him of the burden to prove it at trial. Smythe Cramer, however, contends that since Lamb failed to raise the judicial admission at trial, he waived it and implicitly tried the issue to the jury where he failed to meet his burden of proof. Dietz, although not a party to this appeal, was served with briefs, but has not filed a responsive brief to this or any of the assignments of error. The issue presented here for our consideration concerns whether the trial court properly entered judgment n.o.v. in favor of Smythe Cramer on the issue of Dietz's agency. We begin by - 7 - examining the law regarding the test to be applied in these situations. In Posin v. A.B.C. Motor Court Hotel (1976), 45 Ohio St.2d 271, the court set forth the test to be applied in ruling on a motion for judgment notwithstanding the verdict: The evidence adduced at trial and the facts estab- lished by admissions in the pleadings and in the record must be construed most strongly in favor of the party against whom the motion is made, and, where there is substantial evidence to support his side of the case, upon which reasonable minds may reach different conclusions, the motion must be denied. (Emphasis added.) Further, in Gerrick v. Gorsuch (1961), 172 Ohio St. 417, in its syllabus, the Court held: 2. A party who has alleged and has the burden of proving a material fact need not offer any evidence to prove that fact if it is judicially admitted by the pleading of the adverse party. In such an instance, any evidence with respect to that fact can have no material effect. Also, in State Farm v. Dicenzo (1981), 1 Ohio App.3d 68, the court considered the issue of waiver when a party failed to introduce into evidence an admission obtained in a pleading and yet permitted that issue to be tried before the court. In its headnote, the court stated: 2. Civ. R. 15(B) applies only '[w]hen issues not raised by the pleading are tried by express or implied consent of the parties ***.' Thus, if a party fails to introduce in evidence an admission in a pleading and permits that issue to be tried before the trial court, said party does not waive the benefit of the admission in the pleading. - 8 - A review of the pleadings in this case, reveals that Lamb alleged in his complaint that Dietz acted as an agent and representative of Smythe Cramer acting within the scope of her employment when she gave him a two-page Smythe Cramer form entitled "Seller's Description of the Property," containing allegedly misleading information about the property. In their joint answer, Smythe Cramer and Judith Dietz admitted the delivery of this document to Lamb, denied his interpretation of it, but also admitted the remaining allegations in that paragraph of his complaint. After construing this admission most strongly in favor of Lamb, in accordance with the referenced case authority, we have concluded the trial court erred in granting judgment n.o.v. in favor of Smythe Cramer on this issue. The parties have bound themselves by their admission of agency and thereby relieved Lamb of his burden to establish it. Accordingly, this assignment of error is well taken and that judgment n.o.v. is reversed. The next assignment of error states: II. THE TRIAL COURT ERRED IN REFUSING TO PERMIT THE JURY TO CONSIDER PUNITIVE DAMAGES, WHICH ERROR WARRANTS A RETRIAL ON DAMAGES ONLY. Here, Lamb asserts the trial court erred by directing verdicts in favor of Smythe Cramer and Dietz on the issue of - 9 - punitive damages because he believes the jury should have considered that question. Dietz has not briefed the issue. Smythe Cramer urges that the court properly directed this verdict in its favor in the absence of evidence regarding Dietz's agency or that Smythe Cramer authorized, participated or ratified Dietz's actions. We then are asked to consider the propriety of the court's directed verdicts on the issue of punitive damages. We begin by examining Civ.R. 50(A)(4), which provides the following as the standard for our review: When a motion for a directed verdict has been properly made, and the trial court, after considering the evidence most strongly in favor of the party against whom the motion is directed, finds that upon any determinative issue reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party, that court shall sustain the motion and direct a verdict for the moving party as to that issue. Further, R.C. 2315.21(B)(1) states that punitive damages are recoverable from a defendant in a tort action when: The actions or omissions of that defendant demonstrate ***, aggravated or egregious fraud, ***, or that defendant as principal *** authorized, *** actions or omissions of an agent ***; (Emphasis added.) Also, in its syllabus in Charles R. Combs Trucking, Inc. v. International Harvester Co. (1984), 12 Ohio St.3d 241, the Court stated: - 10 - In each case of alleged fraud the plaintiff, in order to be awarded punitive damages, must establish not only the elements of the tort itself but, in addition, must either show that the fraud is aggravated by the existence of malice or ill will, or must demonstrate that the wrongdoing is particularly gross or egregious. (Emphasis added.) Finally, we note that the court in Fulwiler v. Schneider (1995), 104 Ohio App.3d 398, stated the following at 406: Generally, acts committed within the scope of employment will be authorized, either expressly or impliedly, by the employer. (Emphasis added. Citations omitted.) In that situation, the doctrine of respondeat superior liability will apply and the plaintiff need not prove ratification to hold the employer liable. (Emphasis added.) In this case, the record reflects that Lamb presented evidence at trial that not only did Dietz receive a copy of Petraus' 1990 report, but also she provided one to Norman Jeavons, Esq., a prospective purchaser; and subsequently she deleted the reference to the availability of the soil analysis report from the Smythe Cramer sales brochure leaving the statement that "at inspection verbal comments from the engineer were favorable." In addition she told Lamb that Carver had someone inspect the property, represented that it "got a clean bill of health," and reported that if he wanted documentation he would have to get it from the owner because she did not have a copy. This representation was contradicted by both Carver and Jeavons who both testified that Dietz had a copy of Petraus' report and knew of its contents. - 11 - After considering this evidence most strongly in favor of Lamb and assuming all reasonable inferences from that evidence, we conclude that the court erred in granting directed verdicts for Dietz and Smythe Cramer on the issue of punitive damages because reasonable minds could differ regarding whether this conduct constitutes aggravated or egregious fraud. Accordingly, this assignment of error is well taken; the directed verdicts of the court are vacated and this matter is remanded to the court for a retrial against Dietz and Smythe Cramer on the issue of punitive damages. Lamb's third assignment of error states as follows: III. THE TRIAL COURT ERRED IN JOURNALIZING A JUDGMENT IN WHICH DAMAGES WERE APPORTIONED BETWEEN SMYTHE CRAMER AND JUDITH DIETZ. Appellant Lamb urges that the trial court erred in entering judgment pursuant to the separate jury verdicts returned against Smythe Cramer in the amount of $60,000 and Judith Dietz in the amount of $90,000, and urges our court, albeit without any authority, to enter judgment in the sum of $150,000 or remand the matter for a new trial on damages. Dietz has not submitted a brief on this issue; Smythe Cramer asserts that prior to final argument, Lamb sought a jury instruction on the issue of agency while Smythe Cramer requested a charge on independent contractor; therefore, Smythe Cramer - 12 - argues Lamb cannot now complain of error in the separate jury verdicts when he himself participated in generating those verdicts. We have earlier addressed the import of the judicially admitted agency relationship between Dietz and Smythe Cramer which the court and the parties apparently overlooked during trial of this case, prompting these requested jury instructions. We know of no authority for the legal proposition authorizing an appellate court to mathematically add two separate judgments entered against two separate litigants and enter a collective judgment in favor of the prevailing party and, hence, we decline Lamb's invitation to do so in this case, and further decline to remand these journalized judgments to the trial court for retrial. Finding no error, this assignment is overruled. Smythe Cramer has filed four assignments of error in furtherance of its cross-appeal, the first three of which concern testimony of Joseph Petraus, Lamb's engineering expert, and therefore, we shall consider them together. I. THE TRIAL COURT ERRED IN NOT GRANTING SMYTHE, CRAMER CO.'S MOTION TO EXCLUDE PLAINTIFF'S EXPERT, JOSEPH PETRAUS, FROM TESTIFYING AT TRIAL BECAUSE MR. PETRAUS FAILED TO ADDRESS THE MEASURE OF DAMAGES APPLICABLE TO PLAINTIFF'S FRAUD CLAIM IN HIS EXPERT REPORT. II. - 13 - THE TRIAL COURT ABUSED ITS DISCRETION TO THE PREJUDICE OF SMYTHE, CRAMER CO. BY PERMITTING PLAINTIFF'S EXPERT, JOSEPH PETRAUS, TO RENDER OPINIONS AT TRIAL AS TO MATTERS NOT RAISED OR CONTEMPLATED IN HIS EXPERT REPORT, IN VIOLATION OF LOCAL RULE 21.1 III. THE TRIAL COURT ERRED IN DENYING SMYTHE, CRAMER CO.'S MOTIONS FOR DIRECTED VERDICT AND MOTION FOR JNOV BASED UPON THE PLAINTIFF'S FAILURE TO PRESENT COMPETENT, EXPERT TESTIMONY ON THE ISSUE OF DAMAGES. In three assignments of error, Smythe Cramer attacks the testimony of Joseph Petraus and urges the court abused its discretion and violated Loc.R. 21.1 by permitting him to testify to matters not contained in his original expert report concerning damages Lamb sustained at the time he purchased the property in 1990, and matters not based on reliable scientific, technical, or other specific information. Lamb urges the court properly exercised its discretion by allowing Petraus to offer this testimony and maintains Petraus addressed the issue of damages in his original report. Thus, we are again asked to consider the application of Loc. R. 21.1. to a situation involving expert testimony. The rule states in part: ***. An expert will not be permitted to testify or provide opinions on issues not raised in his report." In situations involving the scope of expert testimony, the trial judge is vested with wide discretion to determine whether a - 14 - witness will be permitted to testify and to impose reasonable limits on the scope of the testimony. An abuse of discretion involves more than an error in law; it implies that the court's attitude is unreasonable, arbitrary or unconscionable. See Tracy v. Merrill Dow Pharmaceuticals (1991), 58 Ohio St.3d 147, and Blakemore v. Blakemore (1983), 5 Ohio St.3d 217. Further, in Molnar v. Beriswell (1930), 122 Ohio St. 348, the court established the measure of damages in a fraud case involving realty as the "difference between the actual value of the property at the time of purchase and sale and its value at that time, had the property been as it was represented to be." (Emphasis added.) In examining the circumstances surrounding Petraus' testimony at trial, all parties knew that Lamb intended to present damage testimony from this witness, but in his report, Petraus had not addressed damages at the time of purchase in 1990. The court, however, permitted limited testimony on this at trial. The determination of whether or not a party attempts to or gains an unfair advantage by presenting testimony from an expert witness not contained in his expert report, but which is a direct extension of it and within the contemplation of the parties, is made by the trial judge who, in the interests of judicial economy and due process, weighs the nature of the contemplated testimony and the reasons offered for and against - 15 - its admission to insure fairness at trial and an equal opportunity to present information to the factfinder without undue prejudice or unfair surprise. Here, the trial court obviously determined that this testimony would assist the trier of fact in reaching a verdict, that it had been within the reasonable contemplation of the parties, and that it would not result in undue prejudice nor unfair surprise to the party opposing its admission. Since the issue of damages had been the subject of the expert's report, the trial court exercised its discretion to allow the testimony, a decision which we conclude does not constitute an unreasonable, arbitrary or unconscionable attitude on the part of the court. Evid.R. 702, as amended July 1, 1994, allows a witness to testify as an expert if the testimony relates to matters beyond the knowledge of lay persons, the witness is qualified as an expert; and the testimony is based on reliable, scientific, technical, or specialized information. The staff notes suggest no intention to change existing Ohio law regarding the reliability of expert testimony. Smythe Cramer challenges Petraus' expert testimony as lacking specificity alleging he only offered "possible" solutions to stabilize the property and utilized a "ballpark cost estimate" to implement remedial measures. The record, however, reflects that he offered four possible methods of reinforcement and testified, "*** that any of these methods would cost on the order - 16 - of $1000 per lineal foot of slope to be protected. ***." We conclude the trial court neither erred nor abused its discretion in allowing this testimony and, therefore, overrule these assignments of error. IV. THE TRIAL COURT ERRED BY PERMITTING THE PLAINTIFF TO: (1) GIVE AN OPINION ABOUT THE PRESENT MARKET VALUE OF HIS PROPERTY; AND (2) ARGUE TO THE JURY THAT HIS OPINION ON VALUE REPRESENTED THE TRUE MEASURE OF DAMAGES. Smythe Cramer argues the trial court erred by allowing Lamb to testify about the value of his home as of the trial date and compounded the error by permitting counsel to use that testimony during final argument in an effort to explain damages to the jury. Lamb concedes the court erred in its conduct of the trial, but argues these errors were harmless. The issue then for our consideration is whether or not the improper evidentiary ruling by the trial court utilized by counsel in final argument constitutes harmless error in this case. We think it does. At the outset, we note that is the duty of a trial court judge to rule upon the competency and admissibility of evidence offered at trial. It is conceded here the court should not have permitted Lamb's valuation testimony as a measure of damages in this case. See Molnar v. Beriswell, supra. During final argument, the court erroneously overruled objections to use of - 17 - this testimony, but did instruct the jury at that time as follows: THE COURT: It's overruled. But let me say, ladies and gentlemen, I'll give you an instruction on damages. This is not the correct instruction. I'll give you the instruction. And, at 629-630, the court correctly instructed the jury on damages: ***. The measure of damages in this case is the difference -- is the benefit of the bargain. This is the difference between the value of the property as it was represented to be and the value of the property at the time of purchase. ***. We further note that the Supreme Court in Pang v. Minch (1990), 53 Ohio St.3d 186, restated its syllabus: 4. A presumption always exists that the jury has followed the instructions given to it by the trial court. (State v. Fox [1938], 133 Ohio St. 154, 10 O.O. 218, 12 N.E. 2d 413; Browning v. State [1929], 120 Ohio St. 62, 165 N.E. 566, approved and followed.) Upon examination and review of the testimony regarding damages in this case, we are not persuaded the errant evidentiary ruling by the court influenced the jury verdicts returned in this case, nor are we convinced that the jury did not follow the court's correct instruction on the measure of damages in this case. Accordingly, we cannot conclude that the court abused its discretion in this regard and we overrule this assignment of error. In accordance with the foregoing, this cause is affirmed in part, reversed in part and remanded to the trial court for further proceedings in accordance with this decision. - 18 - - 19 - It is, therefore, considered that said appellant(s) recover of said appellee(s) 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. PORTER, P.J., and PATTON, J., CONCUR JUDGE TERRENCE O'DONNELL 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 .