07 20 r,f coum COUR IN THE SUPREME COURT OF OHIO. Richard Pettit, et. al., Supreme Court Case No.: PlaintiffslAp pe l lants, vs.

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1 IN THE SUPREME COURT OF OHIO Richard Pettit, et. al., vs. PlaintiffslAp pe l lants, James H. Hughes, et. al., Defen dants/ap pe l lees. Supreme Court Case No.: On Appeal from the Muskingum County Court of Appeals, Fifth Appellate District, Court of Appeals Case No.: CT MEMORANDUM IN RESPONSE TO MEMORANDUM IN SUPPORT OF JURISDICTION Counsel for Appellants: D. Joe Griffith ( ) Dagger, Johnson, Miller Ogilvie & Hampson 144 E. Main Street P. O. Box 667 Lancaster, OH Counsel for Appelles: Miles D. Fries ( ) Gottlieb, Johnston, Beam & Dal Ponte, PLL 320 Main Street P. O. Box 190 Zanesville, OH Counsel for Zemba Brothers, Ltd. Paul-Michael La Fayette ( ) Michael J. Valentine 65 E. State Stteet, 4'h Floor Columbus, OH Counsel for Findeiss Realty Company r,f coum COUR James Hughes, Pro Se 530 Main Street Zanesville, OH

2 EXPLANATION OF WHY THIS CASE IS NOT OF PUBLIC OR GREAT GENERAL INTEREST AND DOES NOT INVOLVE A SUBSTANTIAL CONSTITUTIONAL QUESTION This case involves a real estate purchase contract entered into in the Spring of 2002 between Appellants and James Hughes, a defendant in the trial court action. Appellants were represented by a realtor, Connie Schaeffer of Appellee Findeiss Realty Company. The seller, Mr. Hughes, was also represented by a realtor. The seller's realtor, Carol Goff, contacted Appellee Zembra Brothers Ltd. to ask them to attempt to locate the septic system on the subject property. Appellants had been put on notice that the seller did not know what type of sewage system there was on this property. This was included in the residential property disclosure forms signed by Hughes. Zemba Brothers, hired by and working for the seller's realtor, reported directly to that realtor that they had made two attempts to locate the system but weren't able to either time. Christopher Zemba advised Carol Goff that they were unable to locate a septic tank, despite having utilized various means including a dye test while accompanied by a representative of the Muskingum County Health Department. Zemba Brothers had no contact with the Appellants at any time, nor did they have contact with anyone else involved in this transaction. They worked on behalf of the seller's agent and submitted their bill to the seller's agent. The Appellants cause of action against Zemba Brothers was predicated on certain language that was included in the invoice that was sent to the seller's agent. The invoice was not sent to the Appellants nor was there any direct communication between Zemba Brothers and Appellants. The invoice simply advised the seller's agent that no septic system had been located, that whatever system was there appeared to be working fine and that if Ms. Goff wanted them to do anything further, she should contact them. Appellee never heard anything from Ms. Goff or anyone else requesting that they take any further action. The real estate transaction closed on June 28, Appellee was not informed of the date of the closing nor was Appellee present at the closing. After the closing, Appellant's discovered that there was no septic system on the subject property and that raw sewage was flowing into the Muskingum River. Appellants alleged in their complaint that Zemba Brothers had made negligent misrepresentations to them concerning the 2

3 existence or nonexistence of a septic system. In fact, no representations were ever made by Zemba Brothers to Appellants. The case proceeded to trial and a verdict was rendered in favor of Appellee Zemba Brothers and against Appellants. There are no constitutional issues involved. None are alleged or argued in the Appellants Memorandum in Support of Jurisdiction. The case is not of great public or general interest. The assignment of error that pertains to this Appellee concerns the trial court charging the jury that the defense of caveat emptor applied to Appellee Zemba Brothers. Appellants also take issue with one of the jury interrogatories relating to the caveat emptor defense. The giving of jury instructiohs is within the sound discretion of the trial court and will not be disturbed on appeal absent an abuse of discretion. State v. Martens, 90 Ohio App. 3d 338 (1993). In order to find an abuse of discretion, the Appellate Court must determine that the trial court's decision was unreasonable, arbitrary, or unconscionable and not merely an error of law orjudgment. Blakemore v. Blakemore, 501 Ohio St. 3d 217 (1983). Jury instructions must be reviewed as a whole. State v. Coleman, 37 Ohio St. 3d 286. The trial court's charge to the jury, does not involve great public or general interest. It involves merely the application of the facts and the law to this case to determine whether that defense is available to Appellees Zemba Brothers and whether the trial court gave a correct instruction to the jury. Appellant also takes issue with one of the jury interrogatories that was submitted because of their contention that the defense of caveat emptor did not apply. This argument does not create an issue of great public or general interest, either. 3

4 ARGUMENT THE TRIAL COURT CORRECTLY CHARGED THE JURY THAT THE DEFENSE OF CAVEAT EMPTOR APPLIED TO APPELLEES ZEMBA BROTHERS, LTD. A. The Doctrine of Caveat Emptor applies equally to sellers and sellers agents. Appellants submitted two assignments of error. Only the first assignment relates to Appellee Zemba Brothers, Ltd. so that is the only one that will be addressed here. Appellants argue that the Trial Court erred in instructing the jury that the Appellees qualified for the defense of caveat emptor. They also take issue with one of the jury interrogatories, relating to the caveat emptor defense. The Appellants arguments are not well taken. It should be noted that although the Court used the term caveat emptor in its charge to the jury, the substance of the instruction does not set forth the exact caveat emptor instruction that's contained in Ohio Jury Instructions. The Court charged the jury, in pertinent part, as follows: the Defendants claim that the Plaintiffs had a duty to investigate and were not justified in relying upon the representation or alleged failure to disclose. Where a person has the opportunityto investigate, inspect, inquire, and when the circumstances that cause a person of ordinary care to investigate, inspect or inquire and he fails to do so, the element of justifiable reliance has not been proved and the Defendants cannot recover-or the Plaintiffs cannot recover. Excuse me. If Plaintiffs investigate the facts represented and rely on this investigation and do not rely on facts represented, then the Plaintiffs are not entitled to recover. If representations were made by the Defendants with an intention to deceive or mislead the Plaintiffs causing them to refrain from making an investigation, investigation and inquiry, which in the ordinary-in the use of ordinary care they would have made, there is no duty to investigate and the Plaintiffs may justify relying on the Defendants' representations. If a person has a duty to speak, he must make a full and fair disclosure of his real facts. A partial disclosure is a concealment and may be fraud". This instruction does not misstate the law. It is applicable to the allegations made against Appellee Zemba Brothers, Ltd. Appellants claim that Zemba Brothers made negligent and reckless misrepresentations and that Appellants justifiably relied upon those representations. The Appellees' defense included their claim that the Appellants, in the exercise of ordinary care, had a duty to investigate further. Appellees made no representations to the Appellants as they had no contact with them and were 4

5 not hired by them. Appellee Zemba Brothers, Ltd. was hired by the sellers' realtor, ie. the sellers' agent. They reported directly to and invoiced that agent Zemba Brothers, Ltd. was acting as the sellers' agent. The doctrine of caveat emptor applies to real estate transactions in Ohio, and limits the ability of claimants to raise allegations of fraud or misrepresentation related thereto. In general, the doctrine specifically governs the obligation of sellers to disclose information in real estate transactions and precludes any reliance on certain misrepresentations made by a seller or a seller's agent concerning the condition of said property. The doctrine of caveat emptor precludes recovery in an action bythe purchaser 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. Layman vs. Binns, 35 Ohio St. 3rd 176 (1988). Even more claims are precluded if the real estate is sold "as is". When a buyer contractually agrees to accept property "as is" the seller is relieved of any duty to disclose the property's latent conditions and only has the duty not to commit an affirmative fraud. Kave vs. Buehrle, 8 Ohio App. 3rd 381, 383 (1983). The subject property was sold "as is". The contract between Appellants and Mr. Hughes contains an "as is" provision on the second page. Ohio courts have consistently held that a sellers' agent is as protected by the doctrine of caveat emptor and the "as is" language in a sales contract as the seller. See Buchanan vs. Geneva Chervenic Realt, 115 Ohio App. 3rd (1996); see also Lewis vs. Basinger, 2004 Ohio App. Lexis 5864 (2004); Duman vs. Cam,obell, 2002 Ohio 2253 (8th Dist. 2002). As noted in Lewis, supra, the reason for the rule is obvious. Both an "as is" contract and the doctrine of caveat emptor placed the risk on the buyer. The buyer is the party to the contract who has the burden of discovering latent conditions. That burden does not shift merely because the Defendant is the sellers' agent rather than the seller. Since the buyer bears the risk, these defenses apply equally to both the seller and the seller's agents. In a case decided by Fifth District Court of Appeals, Moore vs. Daw, (1996 Ohio App. Lexis 3763) (5th Dist. 1996) a purchaser of real estate sued a pest control company that had conducted a termite 5

6 inspection. As is true with Appellee Zemba Brothers, Ltd., the termite inspection company in Moore was hired by the seller. The court held that the doctrine of caveat emptor applied to that termite inspection company. In Moore, the sellers arranged for the inspection and the buyers paid for it. Appellant argued that the trial court improperly applied the doctrine of caveat emptor. The court held as follows: "We find the trial court was correct when it applied the doctrine of caveat emptor. Appellant could have further investigated the termite history of the residence or had further inspections conducted because he was put on notice the residence had previously been treated for termites. Appellant also had the opportunity to inspect the residence and did so on several occasions. Finally, we determined in Appellants first and second assignments of error that he could not establish a claim for fraud. Thus, it was appropriate for the trial court to apply the doctrine of caveat emptor." See Moore, supra, at page 8 of the opinion. Appellee Zemba Brothers, Ltd. is in the same position as the termite inspection company was. They were hired by the seller, thereby making them the sellers' agent. Since the doctrine of caveat emptor applies equally to sellers and sellers' agents it was proper to instruct the jury that the caveat emptor defense was available to Zemba Brothers. B. Reversible error does not occur when the challenged instruction did not mislead the jury. In their Complaint, Appellants allege that Zemba Brothers, Ltd. negligently misrepresented the facts to them pertaining to the sewage system on the subject property. The Court instructed the jury on the issues of negligence and comparative negligence and instructed them that the Appellants had a duty to exercise ordinary care. There is no difference in saying that the Appellants had the duty to exercise ordinary care for their own protection and saying that the Plaintiffs had a duty to investigate and were not justified in relying upon any representations or alleged failure to disclose. The evidence in this case was that the Appellants were put on notice that the exact nature of the sewage system on the subject property was unknown. This was conveyed to them in the real property disclosure form submitted by the seller. In addition, the property was sold in an "as is" condition. They obviously were aware of the fact that there was uncertainty concerning the nature or existence of the sewage system or they would not have asked prior to closing if the seller would install a septic system. After Zemba Brothers advised Carol Goff that they could not locate a septic "tank", despite multiple efforts, the Appellants' realtor asked the sellers' 6

7 realtor if the seller would pay to install a septic system (transcript Volume IV, pages 14-15). In reviewing the trial court's use of a particularjury instruction, the law requires the Court to look at the totality of the jury charge in determining whether a portion of it is harmless or prejudicial. Sech vs. Rogers, 6 Ohio St. 3rd, 462 (1983). In so doing, the Court is required to determine whetherthe challenged instruction probably misled the jury in a matter materially affecting the complaining party's substantial rights. Kokitka vs. Ford MotorCompany, 73 Ohio St. 3rd, 89 (1995). If the instructions fairly and correctly state the law applicable to evidence presented at trial, reversible error will not be found merely on the possibility that the jury may have been misled. Reitz vs. Howlett, 106 Ohio App. 3rd 409 (1995). In examining the challenged portion of the jury instructions, it is important to examine the actual elements that the jury was instructed on. What they had to find in order to find in favor of the Appellants. was that the Appellants had justifiably relied upon representations of Zemba Brothers, Ltd. and that the representations made by Zemba Brothers, Ltd. were made with the intention to deceive or mislead the Appellants. The jury was also instructed on negligence and negligent misrepresentation. Those also involve the elements of false information being supplied and the Appellants justifiably relying upon that information. The portion of the Court's charge dealing with negligent representation also refers to the Defendant being liable if the Plaintiff suffers pecuniary loss as a result of their iustifiable reliance on information supplied by Zemba Brothers, Ltd. The interrogatory that specifically relates to the acts of Zemba Brothers was interrogatory number eight. The jury found that Zemba Brothers, Ltd. made no negligent representations to the Appellants. In responding to interrogatory number thirteen, the jury also found that the Appellants were sixty percent negligent, meaning that the jury determined that the fault in not discovering the true nature of the sewage system was primarily (more than fifty percent) that of the Appellants. Reversible error ordinarily cannot be predicated upon one paragraph, one sentence or one phrase of the general charge to the jury. Where the Court's charge to the jury considered, as a whole, is not prejudicial to the objecting party, no reversible error results from a misstatement or ambiguity in a portion thereof. See Hyneman vs. The Cash Register Service Co., 62 Ohio St. 2nd 310 (1980), at page

8 Appellee submits that the trial court's instruction on the defense of caveat emptor was proper as it pertains to them. Assuming, for argument's sake, that this Court were to find that it was erroneous, it constituted harmless error. It is not probable that the jury was misled to Appellants' prejudice. Where the final result would have been the same even if the charging error had not occurred, the error is not prejudicial. See Bookmyer vs. Lindsay Concrete Products Co., 1980 Ohio App. Lexis (9th Dist. 1980) at page 8 of the opinion. Here, the final result would have been the same regardless ofwhetherthat particular section of the instructions had been given and regardless of interrogatory number one because the jury found, in responding to interrogatory number eight, that Zemba Brothers, Ltd. did not make any improper representations to the Appellants. Therefore, a general verdict in their favorwas appropriate and entirely consistent with their interrogatory answers. The jury made no finding that Zemba Brothers did anything wrong and found that Appellant's were more than fifty percent responsible for failing to ascertain the lack of a septic system on the subject property. Reviewing the answers to all of thejury interrogatories it is clear that a general verdict in favor of not only this Appellee but all Defendants in the case was proper. Based upon the interrogatory answers viewed in their entirety it is obvious that thejury was not misled by the challenged instruction. C. Failure to object to a jury interrogatory constitutes waiver of any error. Appellant submits thatjury interrogatory number one was improper because the defense of caveat emptor did not apply. For the reasons set forth above, Appellee submits that caveat emptor did apply to Zemba Brothers. Moreover, Appellant made no objection to interrogatory number one on the record. The failure to object to an interrogatory constitutes waiver of any error. Boewe vs. Ford Motor Co., 94 Ohio App. 3rd 270 (1992). A reviewing court will not consider any error which a party failed to bring to the trial court's attention at a time when that error could have been avoided or corrected by the Court. LeFort vs. Century 21-Maitland Realty Co., 32 Ohio St. 3rd 121 (1987). The purpose of an interrogatory is to test the jury's thinking in resolving an ultimate issue so as to not to conflict with its verdict. Although interrogatories may be addressed to issues of mixed law and fact 8

9 or issues of fact only, the issues must be ultimate and determinative in character. Therefore, a properly posed interrogatory is one which necessitates a finding of a particular question of fact and is of a determinative nature rather than one which invites responses of a mere probative or evidentiary quality. See Freeman vs. Norfolk & W. Rv. Co., 69 Ohio St. 3rd 611 (1994); Ragone vs. Vitaii & Beltrami, 52 Ohio St.2nd 161 (1975). It is well settled that objections to interrogatories must be raised while the jury is still impaneled. Shoemaker vs. Crawford, 78. Ohio App. 3rd 53 (1991). In this case, although the Appellant did object to the jury instruction regarding the defense of caveat emptor no objection was raised to the jury interrogatory and no reference to any objection is made in the Appellants' Brief. Forthe foregoing reason, Appellee submits thatappellants waived any errorthat might have been found to exist with respect to jury interrogatory number one. 9

10 CONCLUSION In consideration of the foregoing, Appellee respectfully submits that this is not a case of public or great general interest and does not involve any constitutional issues. Accordingly, this Court should decline to accept jurisdiction. a Miles D. Fries ( ) Attorney for Defendant, Zemba Brothers, Ltd. GOTTLIEB, JOHNSTON, BEAM & DAL PONTE, P.L.L. 320 Main Street, P.O. Box 190 Zanesville, Ohio Phone: (740) , Fax: (740) Fries.miles@zanesvillelaw.com 10

11 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true copies of the foregoing Memorandum in Response to Memorandum in Support of Jurisdiction were served by Regular U.S. mail this 6th day of October, 2008 upon: D. Joe Griffith, Attorney for Plaintiffs, DAGGER, JOHNSTON, MILLER, OGILVIE & HAMPSON, 144 E. Main Street, P.O. Box 667, Lancaster, Ohio 43130; Paul-Michael La Fayette, and Michael J. Valentine, attorneys for Findeiss Realty Company, 65 E. State Street, 4th Floor, Columbus, Ohio 43215; James Hughes, Pro Se, Defendant, 530 Main Street, Zanesville, Ohio Miles D. Fries ( ) Attorney for Defendant, Zemba Brothers, Ltd. 11

825 I Cascade Plaza 5017 Cemetary Road Akron, Ohio Hilliard, Ohio 43026

825 I Cascade Plaza 5017 Cemetary Road Akron, Ohio Hilliard, Ohio 43026 [Cite as Williams v. Brown, 2005-Ohio-5301.] COURT OF APPEALS MUSKINGUM COUNTY, OHIO FIFTH APPELLATE DISTRICT WILLIE WILLIAMS Appellant/Cross-Appellee -vs- MARCY BROWN, et al. Appellee/Cross-Appellant