COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73011 KENNETH BRITTON, ET AL., Plaintiffs-appellants JOURNAL ENTRY vs. AND CONNALLY ROOFING & REMODELING, ET AL., OPINION Defendants-appellees DATE OF ANNOUNCEMENT OF DECISION: DECEMBER 17, 1998 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court, Case No. CV-299701 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: APPEARANCES: For plaintiffs-appellants: For defendants-appellees: TERRY JENNRICH ROBERT G. WALTON GERACI & LA PERNA CO., L.P.A. 1311 Shaker Square, Suite 211 1305 SOM Center Road, #204 Cleveland, Ohio 44120 Mayfield Heights, Ohio 44124 J.T. VALENTINE & ASSOC. 2000 Lee Road Cleveland, Ohio 44118 JONATHAN L. STARK RALPH A. STARK SCHNEIDER, SMELTZ, RANNEY & LAFOND 629 Euclid Avenue, Suite 1525 Cleveland, Ohio 44114 -2- KARPINSKI, J.: This appeal stems from a dispute involving a leaky roof that had been certified not to leak for three years. The purchasers, plaintiffs-appellants Kenneth and Eleanor Britton appeal from the bench trial dismissal of their claims against the former homeowner, defendant-appellee Ursula Zak, and award of $1,467.90 in damages against the certifying roof contractor, defendants-appellees George Connally and Connally Roofing & Remodeling (collectively, Connally ). Zak, a real estate agent, offered the residence for sale and completed a residential property disclosure form for the property on July 1, 1993. The form disclosed that a portion of the roof had previously leaked and was repaired on that date. The Brittons became interested in purchasing the property and obtained the roofing certification necessary to obtain FHA financing. On December 8, 1993, Connally certified, as a result of an inspection, that the roof was in satisfactory condition and had an estimated remaining useful life of three years. On December 24, 1993, the Brittons completed the purchase. The Brittons testified that the roof above the attic began to leak by March, 1994, within approximately two and one-half months. On December 7, 1995, they filed this action against Connally and their own real estate agent, Valentine & Associates.1 The Brittons' complaint raised claims against Connally of negligence, 1 The claims against Valentine & Associates were ultimately dismissed and are not part of this appeal. -3- breach of contract, breach of warranty, and fraud. They subsequently filed an amended complaint adding claims against Zak, including that she negligently hired and/or supervised Connally, committed fraud, and breached a promise and warranty by concurring with Connally's certification. The record shows that the Brittons obtained a roof repair estimate from Diamond Exteriors on January 4, 1994, shortly after they purchased the house and before they discovered a leak. No repairs were made to fix the leak in the roof at any time after they discovered the leak existed. During the course of the proceedings and despite the existing leak, however, the Brittons made improvements to the attic, for which costs they also seek to recover in this action. The matter was referred to arbitration, and the arbitrators unanimously found in favor of all defendants. The Brittons filed an appeal de novo and the matter proceeded to a bench trial. Plaintiffs presented testimony from four witnesses: Zak and George Connally as if on cross-examination, Eleanor Britton, and Able Roofing employee Edward Nehrig. At the conclusion of plaintiffs' case, the trial court dismissed all claims against Zak and all claims except the negligence claim against Connally. The trial court found in favor of the Brittons against Connally on the negligence claim. After receiving post-hearing briefs concerning damages, the trial court entered findings of fact and conclusions of law supporting its judgment in an order -4- journalized July 17, 1997. The Brittons timely appeal raising four assignments of error. The Brittons' first three assignments of error, which are not separately briefed and argued as required by App.R. 16, challenge the award of only $1,467.90 in damages against Connally.2 The Brittons argue that the trial court either committed an error of law concerning the appropriate measure of compensatory damages or that its findings were against the manifest weight of the evidence. The Brittons argue that the trial court should have awarded them the cost of an entirely new replacement roof at the time that Connally negligently certified that the existing roof had an estimated remaining useful life of three years. They obtained an estimate of $4,893 from Able Roofing in October 1994 to remove the existing three layers of shingles and replace them with a new layer of shingles. They argue that this estimate, discounted for the one year that elapsed after Connally's negligent certification concerning the existing roof in December 1993, constitutes the appropriate measure of damages. It is well established that the appropriate measure of damages, however, whether in contract or tort, is the amount necessary to compensate the party for the actual loss incurred. E.g., Thatcher v. Lane Const. Co. (1970), 21 Ohio App.2d 41, 44. The central principle is that the aggrieved party should be fully compensated for all losses resulting from the breach, but should not be placed in a better position than if the breach had not 2 The assignments of error are set forth in the Appendix. -5- occurred. The appropriate compensation must be tailored to fit the injury under the facts and circumstances of each case. The evidence presented at trial in this case revealed that the existing roof at the time it was certified by Connally was substantially depreciated, approximately 20 to 25 years old, and near the end of its useful life of 25 years. In fact, Eleanor Britton stated the roof looked shabby at the time it was certified by Connally and before she bought the house. Even before the Brittons discovered the roof leak in March 1994, they had obtained an estimate for a new roof. Ordering Connally to provide them with a brand new roof, however, with a useful life of 25 years is substantially different from compensating them for not receiving the roof they bargained for, that is, a roof near the end of its useful life, certified to have only 3 more years of life. Stony Ridge Hill Condominium Owners Ass'n v. Auerbach (1979), 64 Ohio App.2d 40, authored by then judge, later Justice Clifford Brown, involved strikingly similar facts. The condominium owners in Stony Ridge were promised a twenty-year roof, but the roof leaked after fewer than five years elapsed. The replacement cost for a brand new roof was $18,000. The condominium association was awarded not the entire $18,000 roof replacement cost, but rather a prorated cost of $14,543, which was proportionate to the promised remaining useful life of the original roof. The Stony Ridge Court stated as follows: For a temporary injury or damage to a building, the measure of compensatory damages is the reasonable cost of the restoration of the building to the condition it would have possessed if no wrong had been committed, plus the -6- reasonable value of the loss of use of the buildin c ration exceeds the difference in the market value of the property as a whole before and after the injury, in which case the difference in the market value before and after the injury becomes the measure. Northwestern Ohio Natural Gas Co. v. First Congregational Church of Toledo (1933), 126 Ohio St. 140, 184 N.E. 512; Ohigbetween the time of injury and restoration, unless suchost of restoo Co 140 N.E. 356, paragraph 5 of the syllabus; Thatcher v. Lane Constr. Co. [, supra]. Id. at 48. Rather than ordering Connally to pay the cost of a brand new roof in the case at bar, the trial court directed Connally to pay the cost of having to replace the roof sooner than the Brittons expected to replace it. Because Connally certified the existing roof to last 3 years, the Brittons expected not to have to replace it for 3 years. The roof leaked almost immediately, however, so the trial court awarded them interest at the statutory annual rate of 10% for 3 years on the $4,893 cost of replacing the roof. The cost of having to replace the roof 3 years sooner than expected under this formula was $1,467.90. Under the circumstances, the Brittons have failed to show any error by failing to award them the total cost of the roof replacement.3 3 The trial court's measure of damages in the amount of interest on the accelerated cost of repair, while exceedingly practical, is different from the cost of restoration recognized by the case law. We decline to rule on the propriety of the trial court's measure, however, because defendant did not file a cross- appeal and seek to change or reduce the judgment as required by App.R. 3(C)(1). See also e.g., Stony Ridge Hill Condominium Owners Ass'n v. Auerbach, supra at 48 and Brewer v. Brothers (1992), 82 Ohio App.3d 148, 154-155. Our opinion in the case at bar is limited to rejecting plaintiffs' argument that they were entitled to recover the total cost of a brand new roof. -7- The Brittons also complain that the trial court did not award them consequential damages for the cost of improvements made to the attic, which was damaged by the leaky roof. The Brittons made these improvements in 1996, despite knowledge that the roof leaked above them beginning in March, 1994. It is well established, however, that an injured party has a duty to minimize damages and avoid additional loss without undue risk or expense. Foust v. Valleybrook Realty Co. (1981), 4 Ohio App.3d 164, 168. It was unreasonable,moreover, to make improvements immediately below the leaky attic roof without making any effort to fix the leak or otherwise protect the improvements. It would not have taken extraordinary efforts by plaintiffs to avoid incurring this loss. Under the circumstances, the trial court could properly conclude that Connally is not responsible for such loss. Accordingly, the Brittons' first, second, and third assignments of error are overruled. The Brittons' fourth assignment of error challenges the dismissal of their claim of fraud and/or constructive fraud against the home seller, Zak. While the Brittons cite a considerable amount of caselaw to support their arguments, they ignore that the trial court was not persuaded on the facts and dismissed their claims under Civ.R. 41(B)(2) at the close of their case. Trial courts are specifically permitted at that stage of a bench trial to weigh the evidence and evaluate the credibility of witnesses to determine that plaintiffs have not demonstrated a right to recover on their claims. -8- The doctrine of caveat emptor, which the Brittons cite, generally applies to real estate sales contracts. Layman v. Binns (1988), 35 Ohio St.3d 176. As in Layman, the record in the case at bar shows that Zak never met the Brittons or made any oral statements to them. The Brittons do not allege that any of her written statements in the residential property disclosure form were false. Without proving the fundamental element of a false statement, a party fails to state a claim of fraud upon which relief can be granted. The Brittons' remaining argument concerning constructive fraud is no more persuasive. It is well established that no fiduciary relationship exists between the buyer and seller of real estate. See id. The Britons did not present any evidence from which the trial court could infer that Zak knew, and failed to disclose, that Connally's certification was incorrect or that the roof leaked. Zak rented the residence to tenants. Her disclosure forms stated the roof leaked in the past, but that repairs had been made. After those repairs were completed, Connally subsequently certified that the roof was in satisfactory condition with no evidence of leaks. Under the circumstances, the trial court could properly find that the Brittons failed to prove their claims of fraud and constructive fraud.4 4 Zak's brief on appeal requests this court declare the Brittons' appeal to be frivolous and to impose costs under App.R. 23. Such a request should generally be raised by a proper motion. In any event, we reject the request and find there were reasonable grounds for this appeal. -9- Accordingly, the Brittons' fourth assignment of error is overruled. Judgment affirmed. -10- 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. JAMES M. PORTER, P.J., and LEO M. SPELLACY, J., CONCUR. 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). -11- APPENDIX ASSIGNMENTS OF ERROR I. THE INTEREST ON THE ACCELERATED COST OF REPAIR IS A REASONABLE MEASURE OF DAMAGES TO PLAINTIFF IN CONNECTION WITH THEIR PURCHASE OF THE HOME. (SEE FINDINGS OF FACT, CONCLUSION OF LAW, AND JUDGMENT, PAGE 2 VOL. 2108 PG. 757). II. THE AMOUNT THEY OVER PAID FOR THE HOUSE WAS $1,467.90 BEING THE AMOUNT OF INTEREST ON THE ACCELERATED COST OF REPAIR. (FINDINGS OF FACT, CONCLUSION OF LAW, AND JUDGMENT, PAGE 2 VOL. 2108, PG. 757). III. THEN I DON'T THINK YOU WOULD BE ENTITLED TO IT. (TRANSCRIPT PG. 123, 119-122). .