Opinion
No. 90-1232
Submitted April 16, 1991 —
Decided July 10, 1991.
APPEAL from the Court of Appeals for Hamilton County, No. C-880422.
Appellees, Robert A. Wendel and Thomas R. Dunn, are partners in Dunn Wendel Architects ("Dunn Wendel Architects"), appellee, an architectural engineering firm. Prior to 1977, appellant, Robert G. Westlake, and Glenn Shepherd were partners in various real estate projects and utilized the services of Dunn Wendel Architects on several occasions.
In July or early August 1977, Shepherd contacted Robert Wendel regarding a residential apartment project that Shepherd and Westlake were interested in developing in South Carolina called "Village in the Woods." Shepherd requested that Wendel accompany him to Atlanta, Georgia, to look at apartment projects in that city which were similar to the Village in the Woods project contemplated by Shepherd and Westlake. As requested, Wendel travelled to Atlanta and spent a day there looking at apartment projects with Shepherd and Westlake.
Following the trip to Atlanta, Wendel sent a letter to Shepherd dated August 8, 1977 setting forth, on behalf of Dunn Wendel Architects, a proposal for architectural services for the Village in the Woods project. At Shepherd's request, this letter was sent to Shepherd at his home address. Sometime thereafter, the proposal was rejected.
On August 9, 1977, Westlake caused Shelter Concepts, Inc. ("Shelter Concepts") to be incorporated under the laws of Georgia. Shepherd and Westlake were each fifty-percent shareholders of the corporation. One purpose of the corporation was to acquire land for development, and Shelter Concepts (through Westlake) subsequently obtained an option to buy certain property in South Carolina which was the intended location for the Village in the Woods project. However, Dunn Wendel Architects was not notified of the existence of Shelter Concepts.
The name of the corporation was changed to "Sump, Inc." on January 11, 1982.
On or about September 20, 1977, Thomas Dunn sent a letter to Shepherd setting forth another proposal for the services of Dunn Wendel Architects on the intended Village in the Woods project. The proposal was sent to Shepherd's home address at Shepherd's request. This proposal was also rejected. However, in a letter dated October 19, 1977, Dunn set forth a third proposal which was sent to Shepherd's home address, as was customary. This proposal was accepted and provided in part that Dunn Wendel Architects would perform the following work:
"A. Preliminary Site Plan.
"B. Working Drawings.
"* * *
"C. Short form specifications * * *.
"D. Ink plans for rental brochure of each apartment type."
"Fees and payments" for the services were set forth as follows:
"We will provide the above services for the lump sum of ($7,100) seven thousand, one hundred dollars per apartment building type plus ($9,500) nine thousand, five hundred dollars for the club house. As in the past, we would defer payment, if necessary, until closing. If the location of the original site proves unsatisfactory for financial reasons, the preliminary work necessary to resite the project would be accomplished at no additional cost. If the project does not proceed beyond the preliminary stage, the costs, except travel and printing, would be absorbed by Dunn Wendel. Work authorized to continue beyond step `A' will be according to the following fee structure.
"5 apartment building types $35,500 "Club house $ 9,500 $45,000"
Dunn Wendel Architects began work on the project with the understanding that Westlake was the party responsible for the payment of fees since Westlake had the "final say" in every discussion that Dunn and Wendel had with Shepherd and Westlake. Dunn Wendell Architects also began work on the project without ever being notified of the existence of Shelter Concepts.
By the spring of 1978, Dunn Wendel Architects had completed a major portion of the working drawings. These drawings were dated March 1, 1978 and are entitled "VILLAGE IN THE WOODS * * * SHELTER CONCEPTS." At some point, Dunn Wendel Architects was instructed to put this title on the drawings.
In April 1979, Dunn Wendel Architects, having performed numerous revisions of the drawings at Shepherd's or Westlake's request, submitted a bill to Shepherd for services rendered, requesting partial preliminary payment. After receiving no response from Shepherd with regard to the billing, Dunn Wendel Architects attempted to contact Westlake seeking payment on the contract. In the summer or fall of 1979, Westlake met with Wendel and, in addition to requesting certain revisions of the drawings, Westlake assured Wendel that payment for the services rendered by Dunn Wendel Architects would be forthcoming. However, the Village in the Woods project was abandoned when Shelter Concepts lost its option to purchase the South Carolina property. Dunn Wendel Architects was never paid for its services.
Subsequently, Dunn Wendel Architects filed a complaint against Robert Westlake for breach of contract. Later, Dunn Wendel Architects moved to amend its complaint to add Shelter Concepts as a defendant and to set forth claims for fraud and for recovery on the theory of quantum meruit. The trial court never ruled on this motion. However, the parties apparently proceeded to trial under the assumption that the complaint had been amended.
See Civ.R. 15(B).
Following a bench trial, the trial court found in favor of Dunn Wendel Architects, and against Westlake, on the breach of contract claim. The trial court awarded Dunn Wendel Architects one half of the contract price ($22,500), finding that the intent of the parties to the contract was that they would share equally in the risk that the Village in the Woods project would not be completed. Westlake appealed and Dunn Wendel Architects cross-appealed. The court of appeals affirmed the judgment of the trial court in part, reversed it in part and remanded the cause for a redetermination of damages. Specifically, the court of appeals affirmed the judgment of the trial court with respect to Westlake's personal liability but found that the amount of damages awarded by the trial court was against the manifest weight of the evidence. Thus, the court of appeals remanded the cause for a redetermination of damages, including consideration of Westlake's liability under the theory of quantum meruit.
In a series of subsequent entries, the trial court clarified that its judgment was against Westlake, individually, and that the claims against Shelter Concepts were dismissed.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Sirkin, Pinales, Mezibov Schwartz, Marc D. Mezibov and Edmund J. McKenna, for appellees.
Frost Jacobs, Donald McG. Rose, Jill N. Fuchs and Douglas E. Hart, for appellant.
The first issue presented by this appeal is whether appellant Westlake may be held personally liable for the services performed by Dunn Wendel Architects. For the reasons which follow, we hold that Westlake can be held personally liable for the services rendered.
It is well-settled in the law of agency that an agent who discloses neither the existence of the agency nor the identity of the principal is personally liable in his or her contractual dealings with third parties. See, e.g., 1 Mechem, The Law of Agency (2 Ed. 1914) 1039-1041, Section 1410. See, generally, Davis v. Harness (1882), 38 Ohio St. 397; and James G. Smith Assoc., Inc. v. Everett (1981), 1 Ohio App.3d 118, 120-121, 1 OBR 424, 427, 439 N.E.2d 932, 935 (where the existence of the agency and the identity of the principal are unknown to the third party, the dealing is held to be between the agent and the third party and the agent is liable). The reason for this rule is simple. The third party who deals with an agent while unaware of the existence of the principal and the agency relationship intends to deal with the agent, and relies upon the agent's ability to perform. See id.
In the case at bar, Wendel, on behalf of Dunn Wendel Architects, met with Shepherd and Westlake regarding the Village in the Woods project. Dunn Wendel Architects had previous dealings with Shepherd and Westlake and, on those occasions, had always received payment for its services. As such, Dunn Wendel Architects eventually entered into a contract to perform work on the Village in the Woods project believing that it was dealing with Shepherd and Westlake in their individual capacities. However, without the knowledge of Dunn Wendel Architects, Westlake had formed Shelter Concepts as the entity responsible for developing the Village in the Woods project. Dunn Wendel Architects performed services and looked to Westlake for payment in his individual capacity. Westlake now claims that as an agent for Shelter Concepts, he had no part in the contract negotiations and that, therefore, the debt owed to Dunn Wendel Architects is either a corporate debt or solely Shepherd's responsibility as the actual negotiator. We disagree.
We find that Dunn Wendel Architects had reason to rely on Westlake to provide payment for the architectural services. Westlake had personal dealings with Dunn Wendel Architects leading to the formation of the contract. Westlake also had personal contact with Dunn Wendel Architects while the services were being performed and, in fact, he assured Dunn Wendel Architects that it would be paid for its services. Because Westlake failed to disclose the existence of Shelter Concepts and his representative capacity, Westlake is personally liable to Dunn Wendel Architects as a matter of well-established agency law.
Westlake also argues that he is not liable on the contract because, according to Westlake, payment on the contract was contingent upon the successful closing on a loan for the South Carolina property, a condition which did not occur. Thus, Westlake contends that he was discharged from any obligation to perform under the terms of the agreement. We reject this contention.
The contract language at issue herein is as follows: "As in the past, we [Dunn Wendel Architects] would defer payment, if necessary, until closing." The court of appeals held, and we agree, that the unambiguous terms of the contract provided Westlake the opportunity to defer payment until the time of closing, but that when it was apparent that the anticipated closing would not occur, payment under the contract became due. We find nothing in the parties' past practices which would persuade us to reach a different conclusion.
Having established Westlake's personal liability for the services rendered by Dunn Wendel Architects, we now turn our attention to the second (and more important) issue presented by this appeal. Namely, we are asked to determine whether a party who prevails at trial but is, nonetheless, dissatisfied with the result, must move for a new trial in the trial court as a condition precedent to pursuing a cross-appeal in the court of appeals.
In the case now before us, the court of appeals held that Dunn Wendel Architects could properly pursue its cross-appeal challenging the amount of damages awarded by the trial court even though Dunn Wendel Architects prevailed on its claim for breach of contract, and even though Dunn Wendel Architects never filed a motion for a new trial. In so holding, the court of appeals overruled two of its previous cases ( Patrick Media Group, Inc. v. Schneider [Nov. 8, 1989], Hamilton App. No. C-880386, unreported, 1989 WL 133512, and Henry v. Serey, 46 Ohio App.3d 93, 546 N.E.2d 474) which held that a party who prevails at trial cannot pursue a cross-appeal without first filing, in the trial court, a Civ.R. 59 motion for a new trial. The rule established in Patrick Media Group and Serey was an extension of a rule established in a series of cases from Hamilton County holding that the merits of an appeal filed by a party who prevailed at trial could not be addressed by the court of appeals unless the party had moved for a new trial pursuant to Civ.R. 59. See Brogan v. Hagan (1986), 26 Ohio App.3d 81, 26 OBR 255, 498 N.E.2d 234; Fuller v. Cincinnati Gas Elec. Co. (Dec. 28, 1988), Hamilton App. No. C-870837, unreported, 1988 WL 138791; Smith v. Grinker Sudman (Nov. 10, 1987), Hamilton App. No. C-870064, unreported; Krailler v. Carey (Nov. 26, 1986), Hamilton App. No. C-860013, unreported, 1986 WL 13384; and McHale v. Jenkins (June 29, 1983), Hamilton App. No. C-820705, unreported, 1983 WL 8922. In the case at bar, the court of appeals determined that application of its rule requiring a prevailing party to move for a new trial in order to preserve alleged errors for appeal was "inappropriate" in cases involving cross-appeals by prevailing parties. We agree that the application of the rule is inappropriate — but not just for prevailing party cross-appellants. For the following reasons, we find that the filing of a Civ.R. 59 motion for a new trial is not a necessary precondition for any party to obtain appellate review whether the review is sought by way of appeal or by way of cross-appeal filed in response to an appeal by an adverse party.
See, also, Ramos v. Long (June 29, 1990), Portage App. No. 89-P-2103, unreported, 1990 WL 94881; Kennedy v. Keaton (Feb. 16, 1990), Lucas App. No. L-89-102, unreported, 1990 WL 12734; Woodson v. Woodson (Mar. 9, 1990), Lucas App. No. L-89-121, unreported, 1990 WL 21762; and Straka v. Gedeon (May 5, 1989), Lake App. No. 13-012, unreported, 1989 WL 47887.
R.C. 2505.02 defines "final orders." Final orders are appealable. R.C. 2505.03. Nowhere in R.C. 2505.02 or 2505.03 is the appealability of an order conditioned upon the filing of a Civ.R. 59 motion for a new trial. Furthermore, appeals from final orders are governed by the Rules of Appellate Procedure, where applicable. R.C. 2505.03(C). Nowhere in the Rules of Appellate Procedure is the filing of a notice of appeal or cross-appeal conditioned upon a party first filing a motion for a new trial. See, specifically, App.R. 3 and 4(A). Indeed, even Civ.R. 59 contains no such requirement.
App.R. 3(A) provides, in part, that:
"An appeal as of right shall be taken by filing a notice of appeal with the clerk of the trial court within the time allowed by Rule 4. * * *"
App.R. 4(A) provides, in part, that:
"In a civil case, the notice of appeal required by Rule 3 shall be filed with the clerk of the trial court within thirty days of the date of the entry of the judgment or order appealed from. If service of the notice of judgment and its entry is not made on a party within the three-day period provided for in Civ.R. 58(B), then that party shall file the notice of appeal within thirty days of the date of service. A notice of appeal filed before entry of such judgment or order shall be treated as filed after such entry and on the day thereof. If a timely notice of appeal is filed by a party, any other party may file a notice of appeal within ten days of the date on which the first notice of appeal was filed, or within the time otherwise prescribed by this subdivision, whichever period last expires."
Simply put, we can find no persuasive authority in the law and rules of appellate practice which would support the proposition, now adhered to by a very limited number of appellate jurisdictions, that a party who obtains judgment in the trial court must first file a motion for a new trial in order to preserve alleged errors for appeal or cross-appeal. We hold that the filing of a Civ.R. 59 motion for a new trial is not a condition precedent to the filing of a notice of appeal or cross-appeal from an order which is final and appealable. As such, we specifically disapprove of Brogan, supra, and Serey, supra, to the extent that these cases are inconsistent with our holding herein.
Westlake cites In re Guardianship of Love (1969), 19 Ohio St.2d 111, 48 O.O.2d 107, 249 N.E.2d 794, and Clevenger v. Huling (1964), 4 Ohio App.2d 45, 33 O.O.2d 61, 211 N.E.2d 84, affirmed (1965), 3 Ohio St.2d 200, 32 O.O.2d 188, 209 N.E.2d 434, to support the proposition that a motion for a new trial is a prerequisite to obtain appellate review. Neither of these cases supports Westlake's proposition. The court in In re Guardianship of Love held that the guardian of the person and estate of an incompetent has no right to appeal from an order terminating the guardianship where there is no showing that the guardian and the ward are adverse parties. Id. at syllabus. The court in Clevenger recognized the ability of a prevailing party to claim prejudice as to the amount of damages awarded. Id. at paragraph one of the syllabus. Furthermore, neither In re Guardianship of Love nor Clevenger dealt with the question at issue herein.
With respect to Dunn Wendel Architects' cross-appeal, the court of appeals determined that the amount of damages awarded by the trial court was against the manifest weight of the evidence. The court of appeals remanded the cause for a redetermination of the damages Dunn Wendel Architects is entitled to receive from Westlake. Westlake claims no error in this regard other than the court of appeals' addressing the cross-appeal in the first instance.
Accordingly, we affirm the judgment of the court of appeals and this cause is remanded to the trial court for proceedings not inconsistent with this opinion.
Judgment affirmed and cause remanded.
MOYER, C.J., SWEENEY, HOLMES, WRIGHT, H. BROWN and RESNICK, JJ., concur.