Frazzitta et al v. Cheryl L. Venarge Trust, et al

Filing 15

Memorandum Opinion: The Court denies defendants' motion to dismiss the original complaint as moot. (Doc. No. 8 .) Defendants' motion to dismiss the first amended complaint (Doc. No. 12 ) is denied. Judge Sara Lioi on 3/22/2017. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

BARTHOLOMEW J. FRAZZITTA, et al.,

PLAINTIFFS,
vs.
THE CHERYL L. VENARGE TRUST
U/A/D June 5, 1995, et al.,
DEFENDANTS.

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CASE NO. 5:16-cv-746

JUDGE SARA LIOI

MEMORANDUM OPINION

In this state law action, plaintiffs, Bartholomew and Geraldine Frazzitta (collectively
“plaintiffs” or “sellers”), brought suit to recover contract damages resulting from the alleged
breach of a purchase agreement involving the sale of their home. Pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure, defendants, the Cheryl L. Venarge Trust U/A/D June 5, 1995,
David Venarge and Cheryl Venarge (collectively “defendants” or “buyers”), move to dismiss the
action for a failure to state a claim. (Doc. No. 12 [“Mot.”].) Plaintiffs oppose the motion (Doc.
No. 13 [“Opp’n”]), and defendants have filed a reply. (Doc. No. 14 [“Reply”].) For all of the
following reasons, defendants’ motion is denied.
I. BACKGROUND
All facts are taken from the First Amended Complaint and those documents appended
thereto that the Court may properly consider on a Rule 12(b)(6) motion. (Doc. No. 9 (First
Amended Complaint [“FAC”]).) Plaintiffs were the owners of residential property in Summit
County, Ohio. (FAC ¶ 10.) On June 12, 2014, defendants offered to purchase the property from
plaintiffs for $1,300,000 and memorialized their offer by affixing their signatures to a form real

estate purchase agreement. (Id. ¶11; Doc. No. 9-11 (“Purchase Agreement”) at 155.)2 On June 14,
2014, the sellers signed the Purchase Agreement, indicating that they accepted the buyers’ offer.
(Id.)
The Purchase Agreement contained two provisions that are especially relevant to
defendants’ dispositive motion. First, Section “Q”, provided:
(Q) BINDING AGREEMENT: This Agreement shall be deemed binding and
valid when the latter of the parties signs it without making material change and
then delivers either written or verbal notice of such signatures to the other party or
the other party’s agent.
(Id. at 154, emphasis and capitalization in original.) The following section—R—was titled
“SPECIAL CONDITIONS,” and consisted of a box that contained the following handwritten
language: “SELLER AND BUYER MUST AGREE TO ADDENDUM I & II.” (Id., emphasis
and capitalization in original.) It appears that the various parties added their initials below the
handwritten language, along with the date “6-14-14[,]” though it is somewhat unclear as to when
the parties, in particular the buyers, initialed section R.3
These addenda to the Purchase Agreement also play prominently in the buyers’ motion.
Addendum I contains a list of approximately 100 items the sellers agreed to leave with the
property and was signed by the buyers on June 15, 2014. (Id. at 156.) The sellers appear to have
signed Addendum I on June 16, 2014. Moreover, from the list of items that were to be left
behind by the sellers, the words “plantstand,” “topiary,” and “dishes” were crossed out and the

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This document has been placed under seal upon plaintiffs’ motion. (See Doc. Nos. 10, 11.)

All page number references are to the page identification number generated by the Court’s electronic docketing
system.
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Section “L” also addressed the fixtures and equipment that was to be left with the premise. Several words in that
section are crossed out, and the following handwritten language appears: “ALL PER ADDENDUM I OR II.”
Various initials, and the date “6-14-14,” appear below this language. (Purchase Agreement at 153.)
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initials “GF” appeared next to each deletion. (Id.) Addendum II purports to be a continuation of
the laundry list of items that were to be left behind and contains certain other deletions and
additions. (Id. at 157.) These markings form the basis for the buyers’ dispositive motion.
The Purchase Agreement provided that the deadline to close the sale of the property was
June 24, 2015. (FAC ¶ 14; Purchase Agreement, Section D, at 151.) The buyers, “however,
decided not to close the transaction and refused to perform the terms of the Purchase
Agreement[.]” (FAC ¶ 16.) In an email to the sellers’ real estate agent dated June 14, 2014,
defendant Cheryl Venarge explained that they “decided to walk away from” the deal to purchase
plaintiffs’ home because they had determined that the purchase would not be “practical” in that
they only lived in Summit County part of the year. (Doc. No. 9-5 (June 16, 2014 email) at 185.)
On July 27th and 29th, the parties executed a form instructing the title company to release the
$25,000 the buyers had placed in escrow as earnest money pursuant to the terms of the Purchase
Agreement. (Doc. No. 9-2 (Instructions to Release Funds) at 161; see FAC ¶¶ 13, 17; Purchase
Agreement, Section O, at 154.) The release indicated that the parties had entered into an
agreement to purchase plaintiffs’ home on June 16, 2014, and that the buyers decided not to
close on the sale. (Id.) Plaintiffs were unable to sell their home until March 23, 2015, when they
sold the property to a different purchaser for $ 995,000. (Id. ¶ 18.)
Plaintiffs filed the present action in this Court on March 25, 2016, raising a single state
law claim for breach of contract and invoking this Court’s diversity jurisdiction under 28 U.S.C.
§ 1332(a). (Doc. No. 1 (Complaint).) Defendants moved to dismiss the complaint, asserting that
a condition precedent—agreement on the addenda—was never satisfied. (See Doc. No. 8.) In lieu
of a response to the motion, plaintiffs filed the FAC. Defendants subsequently moved to dismiss
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plaintiffs’ amended pleading.4 In their motion to dismiss the amended complaint, the buyers
argue that, when the sellers made changes to the addenda, they tendered a counteroffer that was
never accepted by the buyers. Lacking mutual assent regarding the revisions, the buyers argue
that no contract ever formed and they were free to walk away from the deal. (Mot. at 290-91.)
II. STANDARD OF REVIEW
A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the pleading. Davis H.
Elliot Co., Inc. v. Caribbean Util. Co., Ltd., 513 F.2d 1176, 1182 (6th Cir. 1975). All allegations
of fact by the non-moving party are accepted as true and construed in the light most favorable to
that party. See Grindstaff v. Green, 133 F.3d 421, 421 (6th Cir. 1998) (citing Meador v. Cabinet
for Human Res., 902 F.2d 474, 475 (6th Cir. 1990)). The Court, however, “need not accept as
true legal conclusions or unwarranted factual inferences.” Mixon v. Ohio, 193 F.3d 389, 400 (6th
Cir. 1999) (citing Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)). Nor is
the Court required to accept as true complaint allegations that are contradicted by public records
and other evidentiary materials of which the Court may take judicial notice. See Moody v.
CitiMortgage, Inc., 32 F. Supp. 3d 869, 874-75 (W.D. Mich. 2014) (“court may disregard
allegations in the complaint if contradicted by facts established by exhibits attached to the
complaint”) (quotation marks and citations omitted); see also Williams v. CitiMortgage, Inc., 498
F. App’x 532, 536 (6th Cir. 2012) (“if a factual assertion in the pleadings is inconsistent with a
document attached for support, the Court is to accept the facts as stated in the attached
document”) (quotation marks and citation omitted).

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The Court hereby denies defendants’ motion to dismiss the original complaint as moot.
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The sufficiency of the pleading is tested against the notice pleading requirements of Fed.
R. Civ. P. 8(a)(2), which provides that a complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to relief[.]” Although this standard is liberal, Rule 8
still requires a complaint to provide the defendant with “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167
L. Ed. 2d 929 (2007). Thus, “[t]o survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550
U.S. at 570). A claim is facially plausible “when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550 U.S. at 556). If the plaintiff has not “nudged [her] claims
across the line from conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550
U.S. at 570 (citation omitted).
In deciding a motion to dismiss and/or a motion for judgment on the pleadings under
Rule 12, the Court generally may not consider matters outside of the pleadings without
converting the motion into a motion for summary judgment under Rule 56. As the Sixth Circuit
has held, however, there are a number of exceptions to this rule. Indeed, it is well settled that, in
ruling on a Rule 12 dispositive motion, a district court “may consider the Complaint and any
exhibits attached thereto, public records, items appearing in the record of the case and exhibits
attached to defendant’s motion to dismiss so long as they are referred to in the Complaint and are
central to the claims contained therein.” Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426,
430 (6th Cir. 2008) (citation omitted); see Gavitt v. Born, 835 F.3d 623, 640 (6th Cir. 2016)
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(citations omitted); see also Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d
327, 335 (6th Cir. 2007) (court may consider documents that govern a party’s rights and are
necessarily incorporated by reference in the complaint on a motion to dismiss) (citations
omitted).
The Purchase Agreement, the addenda, and the other documents referenced in and
appended to the FAC form the basis for plaintiffs’ breach of contract claim. Accordingly, the
Court may consider these documents without converting the present motion to dismiss into one
for summary judgment.
III. DISCUSSION
As set forth above, defendants seek dismissal of the FAC. They contend that plaintiffs
have “ignor[ed] one of the most fundamental rules of contract law: that a purported ‘acceptance’
which contains additional, differing, or omitted terms from the offer is not an acceptance at all—
it is a rejection and counter-offer which the original offeror is free to accept or decline for any
reason whatsoever.” (Mot. at 290.) Because they did not accept plaintiffs’ purported counteroffer, it is defendants’ position that there was no mutual assent and no contract ever formed. Not
surprising, plaintiffs disagree with defendants’ assessment. They insist that the Purchase
Agreement was valid and enforceable upon full execution of the contract on June 14, 2016, and
that the alterations to the addenda constituted “a mere modification of the original contract and
the latter remains in force as modified.” (Opp’n at 317, quotation marks and citation omitted.)
The parties do, at least, agree that Ohio law governs this contract dispute. “Under Ohio
common law, contract formation requires ‘mutual assent (generally, offer and acceptance) and
consideration. The plaintiff must also show . . . a meeting of the minds and that the contract was
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definite as to its essential terms.’” Faurecia Auto. Seating, Inc. v. Toledo Tool & Die Co., Inc.,
579 F. Supp. 2d 967, 971 (N.D. Ohio 2008) (quoting Nilavar v. Osborn, 711 N.E.2d 726, 732
(Ohio Ct. App. 1998)); see Tocci v. Antioch Univ., 967 F. Supp. 2d 1176, 1195 (S.D. Ohio 2013)
(similar) (citations omitted); Kostelnik v. Helper, 770 N.E.2d 58, 61 (Ohio 2012) (“A meeting of
the minds as to the essential terms of the contract is a requirement to enforcing the contract.”)
(citation omitted); see also Bruzzese v. Chesapeake Exploration, LLC, 998 F. Supp. 2d 663, 673
(6th Cir. 2014) (noting that, under Ohio law, the term “mutual assent” is used interchangeably
with the term “meeting of the minds” ) (citations omitted); Advance Sign Grp., LLC v. Optec
Displays, Inc., 722 F.3d 778, 784 (6th Cir. 2013) (similar) (citation omitted).
As to mutual assent under Ohio law, the Sixth Circuit has noted that:
The manifestation of assent may be made wholly or partly by written or spoken
words, or by other acts or the failure to act. Whether there has been a
manifestation of mutual assent and/or a meeting of the minds is a question of fact
to be determined from all the relevant facts and circumstances.
Advance Sign Grp., 722 F.3d at 784 (quotation marks and citations omitted); Costner Consulting
Co. v. U.S. Bancorp, 960 N.E.2d 1005, 1010 (Ohio App. Ct. 2011) (noting that “this court has
reversed entries of summary judgment when issues of fact concerning the existence of a contract
remained and when the trial court impermissibly weighed the evidence to determine whether a
contract existed between the parties”) (collecting cases).
Defendants are correct when they represent that a contract is not enforceable until the
parties reach agreement on all essential terms. (Mot. at 294, citations omitted.) See Kostelnik,
770 N.E.2d at 61 (citation omitted). Accordingly, the relevant question becomes: when did the
parties intend the agreement would be effective; or, approaching it from a different angle, was an
agreed list of personal items to be left behind an essential term of the contract requiring mutual
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assent?
Relying on the phrase “must agree” in Section R of the Purchase Agreement, defendants
argue that it was clearly the parties’ intent that the “Purchase Agreement would be complete,
binding, and enforceable only if the parties agreed to and mutually executed Addenda I & II.”
(Mot. at 296, record citation omitted.) Because the parties never reached agreement as to each
item identified in the addenda, it is the sellers’ position that no contract ever formed and they
were free to abandon the deal without consequences. They contend that the sellers made a
counteroffer when they made changes to the addenda—a counteroffer the buyers never accepted.
This position is persuasive. The Purchase Agreement references the addenda twice, and the
second reference comes with a caution that there “must” be agreement as to these documents.
Still, the Court is reluctant to make a determination as to mutual assent at this early stage in the
litigation, and the buyers have failed to direct the Court to any authority that would support such
a ruling at this time.5 Thus, this case will continue. When the Court is asked to revisit the issue of
mutual assent, as it will undoubtedly be on a Rule 56 motion, the parties should be prepared to
fully discuss the role of the Court or a factfinder in determining this contract element and the
evidence that may be considered.

Even after the sellers raised the issue of whether the buyers’ motion to dismiss was premature, the buyers
continued to rely on Ohio case law that grew out of summary judgment rulings and/or jury verdicts.
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IV. CONCLUSION
For all of the foregoing reasons, defendants’ motion to dismiss the FAC (Doc. No. 12) is
denied.
IT IS SO ORDERED.

Dated: March 22, 2017
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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