COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71875 BRAD BLACKBURN, ET AL., : : Plaintiffs-Appellees : JOURNAL ENTRY : and vs. : OPINION : T & L BUILDERS, INC., ET AL., : : Defendants-Appellants : DATE OF ANNOUNCEMENT OF DECISION : FEBRUARY 12, 1998 CHARACTER OF PROCEEDING: : Civil appeal from : Common Pleas Court : Case No. 270917 JUDGMENT : AFFIRMED. DATE OF JOURNALIZATION : APPEARANCES: For plaintiffs-appellees: Gregory M. Lichko Roy J. Schechter TEAMOR, LICHKO & BROWN 1510 Hanna Building Playhouse Square Cleveland, Ohio 44115-2001 For defendants-appellants: Kenneth B. Baker Michael D. Slodov JAVITCH, BLOCK, EISEN & RATHBONE Bond Court Building, 14th Floor 1300 East 9th Street Cleveland, Ohio 44114 -2- NAHRA, J.: Appellants, Larry Bloch and T & L Builders, Inc., appeal from the trial court's judgment granting summary judgment in favor of appellees Dr. Bradley A. Blackburn and Sandra L. Blackburn. For the following reasons we affirm the judgment of the trial court. In Fall of 1993, the Blackburns were interested in purchasing a piece of real estate located at Sublot 9 Settler's Lane, Pepper Pike, Ohio and constructing a home thereon. As a result, Dr. Blackburn responded to the number posted in front of the property and entered into discussions with appellant Bloch. Following these discussions, on or about November 17, 1993, the Blackburns and Bloch executed an option agreement. This agreement gave the Blackburns a thirty-five (35) day exclusive option to purchase the property. Consideration for the option was ten thousand dollars ($10,000). The agreement provided, in pertinent part, that if this option is exercised, the remainder of said option money not expended for architectural fees shall be credited toward the purchase price of the single family home to be built on the property. This option agreement was signed by the Blackburns and Bloch, as President of T & L Builders, Inc. On December 18, 1993, the Blackburns exercised the option and entered into a purchase agreement for the property. The sale price agreed upon was two hundred thousand dollars ($200,000), earnest money of ten thousand dollars ($10,000), and a closing date of February 1, 1994. This agreement provided, in relevant part, that if the parties did not close by February 1, 1994 and the contract was not altered by -3- mutual assent of the parties, all funds deposited by Buyer to Seller shall be returned . In both agreements appellants were identified as owners of the property. Approximately two weeks after the execution of the purchase agreement, Dr. Blackburn telephoned Bloch and informed him of his intentions not to go through with the agreement and the unexecuted agreement to have appellants build a house on the property for the Blackburns. Dr. Blackburn also asked Bloch for the return of his option and earnest money, and Bloch ultimately refused. After suit was filed by the Blackburns, they discovered that Bloch was not the owner of the property and had never had title thereto; but that the title throughout was held by Elaine Liston. Appellants' claim that they had an oral option to purchase the property from Ms. Liston. This oral option, according to Bloch, afforded him the ability to perform under the contracts he entered with the Blackburns. Ms. Liston testified that Mr. Bloch was never given this option. The trial court granted summary judgment in favor of the Blackburns on their claims of breach of contract, fraud, and unjust enrichment. The trial court also granted appellees summary judgment on appellants' counterclaim of breach of contract. Appellants timely appealed and assigned five errors for our review. I. Appellants' Assignments of Error I through IV raise essentially the same issues and shall be addressed together. They are: I. THE TRIAL COURT PREJUDICIALLY ERRED IN GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT, AS THERE EXISTED -4- A GENUINE ISSUE OF MATERIAL FACT AS TO PLAINTIFFS' CLAIM FOR BREACH OF CONTRACT AND PLAINTIFFS WERE NOT ENTITLED TO JUDGMENT AS A MATTER OF LAW. II. THE TRIAL COURT PREJUDICIALLY ERRED WHEN IT CONCLUDED THAT THE PARTIES DID NOT HAVE A VALID CONTRACT AS A MATTER OF LAW BECAUSE DEFENDANT T & L BUILDERS, INC. WAS NEVER THE OWNER OF THE REAL PROPERTY IN QUESTION. III. THE TRIAL COURT PREJUDICIALLY ERRED IN GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT, AS THERE EXISTED A GENUINE ISSUE OF MATERIAL FACT AS TO PLAINTIFFS' CLAIM FOR FRAUD. IV. THE TRIAL COURT PREJUDICIALLY ERRED IN GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT, AS THERE EXISTED A GENUINE ISSUE OF MATERIAL FACT AS TO PLAINTIFFS' CLAIM FOR UNJUST ENRICHMENT, AND PLAINTIFFS WERE NOT ENTITLED TO JUDGMENT AS A MATTER OF LAW ON THEIR CLAIM FOR BOTH UNJUST ENRICHMENT AND BREACH OF CONTRACT. As to the option agreement, appellants accepted $10,000 in consideration of their promise to keep the property available to the appellees for 35 days. However, this consideration was illusory as the appellants did not own the property. The owner was free to sell the property to anyone and indeed had the property listed for sale at that time with a real estate firm. Moreover, the option agreement provided that if the option were exercised, the $10,000 would be applied to the purchase price of the single family home to be built on the property by T & L Builders, Inc. . Thus, because of the misrepresentation in the option agreement that appellants owned the property and had the ability to grant such an option, and because the $10,000 was to be applied on a building contract which was never entered into, the appellees were entitled to recover the $10,000 deposit on the option agreement. As to the agreement for the purchase of the lot, the appellants again represented that they owned the property. Despite -5- this representation in the agreement, appellants claim appellees were aware they did not actually own the property. Appellants also claim actual ownership was unnecessary since appellees informed Bloch they did not intend to complete the transaction before the time for performance by appellants had arrived. In this regard appellants are correct. An agreement for the sale of real estate is binding even though the offeror may not own the property at the execution of the agreement. The key element is whether at the time for consummation of the contract the seller is in a position to carry out the contract. Brow v. Cannady (1939), 29 Ohio Law Abs. 497. Since the time for consummation of the contract did not arrive because the purchasers withdrew the question is what damages, if any, are due appellants. Generally, a defaulting purchaser cannot recover a comparatively small advance payment. Schottenstein v. DeVoe, 83 Ohio App. 193, 82 N.E.2d 552. However, here the $20,000 ($10,000 from the option agreement and $10,000 from the purchase agreement) sought to be retained by appellants is 10% of the total purchase price as compared to the 3 1/2% found to be subject to forfeiture in Ottenstein v. Western Reserve Academy, et al. (1977), 54 Ohio App.2d 1, 374 N.E.2d 427. The proper measure of damages, if any, in this case would be the difference between the contract price and the market value of the property at the time of the breach. Roesch v. Bray (1988), 46 Ohio App.3d 49. Here no damages are available to appellants since they did not own the property and, in fact, the property was later sold by the -6- owner for more than the price appellants would have received. Additionally, appellants in the summary judgment filings did not show any other damages such as fees for architectural drawings which they would have been able to recoup under the option agreement. Thus, the trial court correctly found for appellees. II. Defendants' Assignment of Error V states: V. THE TRIAL COURT PREJUDICIALLY ERRED IN GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT ON DEFENDANTS COUNTERCLAIM,AS GENUINE ISSUES OF MATERIAL FACT EXISTED WARRANTING A DENIAL OF PLAINTIFFS' MOTION. In this assignment, appellants apparently claim entitlement to damages for lost profits on the contract to build a home for appellees. This contract was never entered into and thus this claim fails. Judgment affirmed. -7- It is ordered that appellees recover of appellants their costs herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Common Pleas 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. SWEENEY, JAMES D., C.J., and ___________________________________ JOSEPH J. NAHRA O'DONNELL, J., CONCUR. 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 .