COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NOS. 72698 & 72768 BONNIE MACDONALD, : : Plaintiff-Appellee/ : Cross-Appellant : JOURNAL ENTRY : and vs. : OPINION : HARRY EDWARDS, ET AL., : : Defendants-Appellants/ : Cross-Appellees : DATE OF ANNOUNCEMENT OF DECISION : JULY 9, 1998 CHARACTER OF PROCEEDING: : Civil appeals from : Common Pleas Court : Case No. 288548 JUDGMENT : AFFIRMED. DATE OF JOURNALIZATION : APPEARANCES: For plaintiff-appellee/ James E. Powell cross-appellant: Joseph G. Stafford 380 Lakeside Place 323 Lakeside Avenue, West Cleveland, Ohio 44113 For defendant-appellant/ A. P. Leary cross-appellee, Harry NEWMAN, LEARY & BRICE Edwards: 214 East Park Street Chardon, Ohio 44024 -2- For defendant-appellant/ J. Terrence Burke cross-appellee, Realty One: Jon F. Deegan Realty One Corporate Center 6000 Rockside Woods Boulevard Independence, Ohio 44131-2350 For defendant-appellant/ James C. McSherry cross-appellee, The J & E 33 River Street Investment Co.: Chagrin Falls, Ohio 44022 -3- NAHRA, P.J.: In 1993, Bonnie MacDonald, appellee and cross-appellant (hereinafter MacDonald ), purchased property located in Bainbridge Township from Harry and Mary Anne Edwards, appellants and cross- appellees (hereinafter the Edwards ), who listed the house for sale with Dale Richmond, a realtor working for Realty One, Inc., cross-appellee (hereinafter Realty One. ) The Edwards purchased the home from its builder, The J & E Investment Co. (hereinafter J & E Investment. ) The property has a creek that runs adjacent to the back and then turns into an underground pipe which runs under the property and across the street. There is a retaining wall supporting the property next to the creek. Prior to the sale of the home, the Edwards prepared a Property Disclosure Form, pursuant to R.C. 5320.30, which required the Edwards to state whether they knew of any flooding, drainage, settling, or grading problems currently affecting the property. On the disclosure form, the Edwards stated that they knew of no problems of this nature. After MacDonald moved into the home, she discovered drainage, settling, and flooding problems with the property. Specifically, she experienced severe flooding of the property and in her home in August 1994 and January 1995. During the flooding in August 1994, the house's first floor was under water and she had to exit the home through a window with the assistance of a fireman. At that time she suffered extensive damage to her personal property stored -4- on the first floor of the home. Additionally, settling of the property occurred after her purchase of the property. MacDonald brought this lawsuit against the Edwards, Realty One, and J & E Investment. MacDonald and J & E Investment reached a settlement and MacDonald voluntarily dismissed with prejudice her claims against it. Prior to trial, Realty One was granted summary judgment. At trial, MacDonald presented evidence that the Edwards were aware of past flooding problems on the property and had complained to county and township officials about them. In 1986, Harry Edwards was told by the Geauga County Engineer's Office that the drainage pipe under the property was too small and would not take the flow of water under a hard rain. In 1989, the property and home was subject to a severe flood which the Edwards believed to be a one-time occurrence caused by the loosening of an abandoned railroad trestle which had acted as a dam. In 1990, Harry Edwards advised the local police that the creek had more water than it could handle and had caused flooding in the past. Harry Edwards also admitted that he and his wife were concerned with the water problems associated with the property and that it was one reason they sold. They testified that they informed Dale Richmond, their realtor, of past problems which they believed to be corrected. MacDonald presented expert testimony as to the value of the house, as well as expert testimony as to the nature of the drainage and water problems. The jury found the Edwards liable to MacDonald -5- for $18,953.00 in damage to her personal property and for $40,000.00 in damage to her real property. The Edwards raise assignments of error concerning the trial and will be addressed in part II of this opinion, infra. In a cross-appeal, MacDonald raises assignments of error regarding Realty One, which assignments of error will be addressed in part I of this opinion, infra, as well as regarding the trial, which assignments of error will be addressed in part III of this opinion. I. Judge Lillian Greene was assigned to preside over this case. At the final pre-trial conference, Judge Greene informed the parties that she would grant Realty One's motion for summary judgment and that the case would proceed to trial between MacDonald and Edwards. Thereafter, the case was assigned to Judge Robert Lawther for trial. After trial, Judge Greene made the following journal entry on April 8, 1998: This J.E. shall correct J.E. of 3/5/97; Deft. Realty One's motion for summary judgment was granted 01/06/97; parties were informed of this ruling at 1/6/97 final pretrial, however, ruling was never journalized. Docket should be corrected to read that this motion was granted 1/6/97 and not 3/5/97. A. MacDonald's first assignment of error in her cross-appeal reads: I. THE TRIAL COURT ERRED WHEN IT ISSUED AN ORDER AWARDING SUMMARY JUDGMENT IN FAVOR OF DEFENDANT REALTY ONE WHERE THE COURT DID NOT HAVE ANY JURISDICTION TO ISSUE ANY ORDERS IN THE CASE. -6- MacDonald argues that Judge Greene was without jurisdiction to enter summary judgment because the case had not been reassigned to her after being assigned to Judge Lawther for trial. In State v. Greulich (1988), 61 Ohio App.3d 22, 24, 572 N.E.2d 132, 133, the court noted the purpose and use of a nunc pro tunc entry as follows: A nunc pro tunc order may be issued by a trial court, as an exercise of its inherent power, to make its record speak the truth. It is used to record that which the trial court did, but which has not been recorded. It is an order issued now, which has the same legal force and effect as if it had been issued at an earlier time, when it ought to have been issued. Thus, the office of a nunc pro tunc order is limited to memorializing what the trial court actually did at an earlier point in time. State, ex rel. Phillips, v. Indus. Comm. (1927), 116 Ohio St. 261, 155 N.E.2d 798. In this case, Judge Greene informed the parties that Realty One's motion would be granted. The case was assigned to Judge Lawther for trial and the parties acted as if Judge Greene had journalized her grant of Realty One's motion for summary judgment. Judge Greene's April 5, 1997 nunc pro tunc journal entry was an order memorializing an act done when the case was assigned to her. As a nunc pro tunc order relates back to the date the act occurred, Judge Greene had authority to make the entry. We overrule MacDonald's first assignment of error. B. MacDonald's second assignment of error reads: II. THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY JUDGMENT IN FAVOR OF DEFENDANT REALTY ONE WHERE THERE WERE GENUINE ISSUES OF FACT FOR TRIAL. -7- MacDonald argues that summary judgment was improper because Dale Richmond, Realty One's agent, advised the Edwards not to disclose the flooding problems at the house. Realty One argued that it was entitled to summary judgment because MacDonald cannot show that it participated in fraud or made false representations to MacDonald. A grant of summary judgment is reviewed de novo. Brown v. Scioto Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711, 622 N.E.2d 1153, 1158. A motion for summary judgment may be granted when a court 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 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.3d 317, 327, 364 N.E.2d 267, 274. Once a party has demonstrated it may be entitled to summary judgment, the non-moving party then has the burden to set forth evidentiary material to defeat the motion for summary judgment. See, Dresher v. Burt (1996),75 Ohio St.3d 280, 293, 662 N.E.2d 264. MacDonald alleged that Realty One and/or its agent, Dale Richmond, committed fraud by advising the Edwards to not disclose the past flooding on the property. Realty One argues that it was entitled to summary judgment as MacDonald never spoke with Realty One or its agents and it did not make any false statements or representations to her, specifically noting that the property -8- disclosure statement was signed by the Edwards and contains the following language: Owner's Statements: The representations contained on this form are made by the owner and are not the representations of the owner's agent or subagent. This form and representations contained in it are provided by the owner exclusively to potential purchasers in a transfer made by the owner and are not made to purchasers in any subsequent transfers. The information contained in this disclosure form does not limit the obligation of the owner to disclose an item of information that is required by any other statute or law to be disclosed in the transfer of residential real estate. (Emphasis added.) In order to maintain an action for fraud against Realty One, MacDonald must show that she justifiably relied on statements made or acts done by Realty One to conceal a defect in the home. Burr v. Board of County Comm'rs. of Stark County (1986), 23 Ohio St.3d 69, 491 N.E.2d 1101, syllabus paragraph 2; Kaye v. Buehrle (1983), 8 Ohio App.3d 381, 457 N.E.2d 373. We are not persuaded that MacDonald demonstrated evidence of reliance on representations made by Realty One or of any act by Realty One to conceal a defect in the property. The property disclosure form upon which MacDonald relies to support her allegation of fraud contains representations solely attributable to the Edwards and she had no contact with Realty One or its agents. As MacDonald has not shown evidence of reliance upon acts or statements of Realty One to support her allegation of fraud, the grant of summary judgment was proper. We overrule MacDonald's second assignment of error. II. -9- We now address the Edwards' assignments of error. A. The Edwards' first assignment of error reads: I. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION IN PERMITTING THE APPRAISER, JULIAN VANNI, TO RENDER AN EXPERT OPINION OVER OBJECTION AND IN OVERRULING DEFENDANTS' MOTION TO STRIKE MR. VANNI'S TESTIMONY. MacDonald called Julian Vanni, a real estate broker and appraiser, to testify as to the value of her home at the time she purchased it and as to the value of the home after the water and drainage problems were discovered. During his testimony, Vanni offered his opinion as to the value of the house, based on his knowledge of the home and the real estate market as well as the reports prepared by MacDonald's experts. Vanni testified that the property, which MacDonald purchased for $120,000.00 was presently worth $80,000.00. The Edwards objected to that portion of Vanni's testimony in which he stated that the repairs to the home could cost as much as $40,000.00. The Edwards claim that because no evidence established the specific cause of the drainage problems and flooding associated with the property, they were prejudiced by Vanni's speculation as to the cost of the repairs. The admission of expert testimony rests within the broad discretion of the trial court and will be examined under an abuse of discretion standard. Scott v. Yates (1994), 71 Ohio St.3d 219, 221, 643 N.E.2d 105, 106. An abuse of discretion connotes more than error, it is a decision by the trial court which is -10- unreasonable, arbitrary, or unconscionable. Rock v. Cabal (1993), 67 Ohio St.3d 108, 112, 616 N.E.2d 218, 222. Vanni testified as to the value of the home with and without defects. The court did not err in allowing this testimony. Regardless of the reasons as to why Vanni appraised the current value of the property, as an appraiser he is entitled to testify to his opinion. For these reasons, the court did not abuse its discretion by allowing Vanni to testify. We overrule the Edwards' first assignment of error. B. The Edwards' second and fourth assignments of error read: II. THE TRIAL COURT ERRED IN OVERRULING DEFENDANTS' MOTION FOR A DIRECTED VERDICT. IV. THE JURY VERDICT IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. At the close of MacDonald's case, the Edwards made a motion for a directed verdict pursuant to Civ.R. 50. Civ.R. 50(A) provides the standard for granting a directed verdict: (4) When Granted on the Evidence. When a motion for a directed verdict had been properly made, and the trial court, after construing the evidence most strongly in favor of the party against whom the motion is directed, finds that upon the evidence submitted and that conclusion is adverse to such party, the court shall sustain the motion and direct a verdict for the moving party as to that issue. The Edwards argue that MacDonald did not present evidence to establish her claim of fraud. The second paragraph of the syllabus of Burr v. Board of County Comm'rs. of Stark County (1986), 23 Ohio St.3d 69, 491 N.E.2d 1101, states in pertinent part that: The elements of fraud are: -11- (a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance. (Cohen v. Lamko, Inc. [1984], 10 Ohio St.3d 167, 462 N.E.2d 407, followed.) See, also, Kaye v. Buehrle (1983), 8 Ohio App.3d 381, 457 N.E.2d 373. At trial, MacDonald presented evidence that: a) the Edwards had a duty to disclose drainage and flooding problems in the property disclosure form; b) that drainage and flooding problems were material to her purchase of the property because as a single, retired woman she had sought to purchase a home that required little upkeep or maintenance; c) that the Edwards actually knew that the property flooded and that the drainpipe was too small prior to completing the disclosure form; d) that the Edwards purposefully did not disclose all problems known to them as it would adversely affect the ability to sell their home; e) that she relied upon the Edwards' representations in the disclosure form in deciding to purchase the property; and f) that she experienced damage both to personal property and real property in floods after purchasing the property. -12- This evidence, if believed, would allow the jury to find the Edwards had committed fraud. For this reason, the trial court properly overruled the Edwards' motion for a directed verdict. In Seasons Coal Co., Inc. v. City of Cleveland (1984), 10 Ohio St.3d 77, 80, 461 N.E.2d 1273, 1276, the Ohio Supreme Court stated: Judgments supported by some competent, credible evidence going to all the essential elements of the case will not be reversed by a reviewing court as being against the manifest weight of the evidence. (Quoting C.E.Morris Co. v. Foley Construction Co. (1978), 54 Ohio St.2d 279, 376 N.E.2d 578.) A reviewing court is to give great deference to factual findings where there is competent and credible evidence supporting a verdict. Id. As noted supra, MacDonald presented evidence as to all the elements of fraud, which evidence was not so incredible as to be facially incompetent. Accordingly, the verdict was not against the manifest weight of the evidence. We overrule the Edwards' second and fourth assignments of error. C. The Edwards' third assignment of error reads: III. THE TRIAL COURT ERRED IN FAILING TO INSTRUCT ON THE LAW OF CAVEAT EMPTOR. The Edwards argue that the court erred by failing to give an instruction on the law of caveat emptor, where MacDonald had the opportunity to inspect the property purchased and the purchase agreement specifically states the property as being purchased in an as is condition. -13- In Layman v. Binns (1988), 35 Ohio St.3d 176, 519 N.E.2d 642, syllabus, the Ohio Supreme Court stated: The doctrine of caveat emptor precludes recovery in action by the purchaser for a structural defect in real estate where (1) the condition complained of is open to observation or discoverable upon reasonable inspection, (2) the purchaser had the unimpeded opportunity to examine the premises, and (3) there is no fraud on the part of the vendor. (Traverse v. Long [1956], 156 Ohio St. 249, 59 O.O. 325, 135 N.E.2d 256, approved and followed.) In this case, MacDonald brought a claim of fraud based on the failure of the Edwards to disclose latent defects. The court did not err by omitting the Edwards' proposed instruction. See, Czarnecki v. Basta (1996), 112 Ohio App.3d 418, 422-23, 679 N.E.2d 10, 13. (Doctrine of caveat emptor inapplicable in case alleging concealed defects and fraudulent misrepresentations.) We overrule the Edwards' third assignment of error. III. In her cross-appeal, MacDonald's third and fourth assignments of error regard the trial. A. MacDonald's fourth assignment of error reads: IV. THE TRIAL COURT ERRED WHEN IT GRANTED A DIRECTED VERDICT ON PLAINTIFF'S PUNITIVE DAMAGE CLAIM WHERE THERE WERE ISSUES OF FACT FOR THE JURY. As noted in part II.B., supra, Civ.R. 50(A)(4) provides that a directed verdict is to be granted after construing the evidence most strongly in favor of the non-moving party. In Cabe v. Lunich (1994), 70 Ohio St.3d 598, 601, 640 N.E.2d 159, 162, the Ohio -14- Supreme Court noted the requisite showing for an award of punitive damages by stating: Actual malice is necessary for an award of punitive damages, but actual malice is not limited to cases where the defendant can be shown to have had an evil mind. We held in Preston v. Murty (1987), 32 Ohio St.3d 334, 512 N.E.2d 1174, that actual malice is present where the defendant possessed either (1) that state of mind under which a person's conduct is characterized by hatred, ill will or a spirit of revenge, or (2) a conscious disregard for the rights and safety of other persons that has a great probability of causing substantial harm. In Preston, we noted that the latter category of actual malice includes extremely reckless behavior revealing a conscious disregard for a great and obvious harm. Id. at 335, 512 N.E.2d at 1175. In Charles R. Combs, Trucking, Inc. v. International Harvester Co. (1984), 12 Ohio St.3d 241, 466 N.E.2d 883, paragraph three of the syllabus reads: 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. In this case, there is no evidence that the Edwards maliciously withheld the history of drainage and flooding problems with the property where they believed that the flooding which reached the house was the result of a one-time occurrence. Moreover, the fraud in this case committed cannot be said to be gross or egregious or was such that would lead to serious or substantial harm without definitive evidence the Edwards knew the flooding MacDonald experienced would occur to the extent that it actually did. Accordingly, we cannot find that reasonable minds -15- could determine that the Edwards acted in such an egregious manner as to justify an award of exemplary damages. We overrule MacDonald's fourth assignment of error. B. MacDonald's third assignment of error reads: III. THE TRIAL COURT ERRED WHEN IT FAILED TO AWARD PLAINTIFF RESCISSION OF THE SALE OF THE HOME WHERE CLEAR AND CONVINCING EVIDENCE SHOWED THAT THE SALE WAS PROCURED BY THE SELLERS' FRAUD. Rescission of a contract is available in an action for fraud as an equitable remedy. A reviewing court should not reverse the equity court's decision unless there is an abuse of discretion. Minor Child of Zentack v. Strong (1992), 83 Ohio App.3d 332, 335, 614 N.E.2d 1106, 1108. (Citing Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 450 N.E.2d 1140, 1141.) MacDonald argues that she is entitled to rescission of the contract because it was procured by fraud. However, as an equitable remedy, MacDonald must demonstrate upon appeal that the trial court abused its discretion by disallowing her motion for rescission. MacDonald has not shown that the trial court acted unreasonably, unconscionably, or arbitrarily. See, Rock, 67 Ohio St.3d at 112, 616 N.E.2d at 222. Rescission is an alternate remedy to legal damages. MacDonald received legal damages determined by a jury. As MacDonald had been made whole by the verdict of the jury, we cannot say the trial court abused its discretion by not allowing MacDonald rescission of the contract. We overrule MacDonald's third assignment of error. Judgment affirmed. -16- -17- Costs to be divided equally between plaintiff-appellee/cross- appellant and defendants-appellants/cross-appellees. 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. JOSEPH J. NAHRA PRESIDING JUDGE PATTON, J., AND CORRIGAN, MICHAEL J., J., CONCUR. 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 .