Will v. View Place Civic Assn

Full title: WILL et al. v. VIEW PLACE CIVIC ASSOCIATION

Court: Court of Common Pleas, Hamilton County

Date published: Dec 18, 1989

61 Ohio Misc. 2d 476 (Ohio Com. Pleas 1989)

580 N.E.2d 87

Opinion

No. A-8709167.

Decided December 18, 1989.

Manley, Burke Fisher and Tim M. Burke, for plaintiffs.

Bruce Petrie, for Joseph Wolke and View Place Civic Association.

Lindhorst Dreidame and James M. Moore, for Daniel Hummer.

Frost Jacobs and Pierce E. Cunningham, for Kokosing Construction Co.

ANN MARIE TRACEY, Judge.

This matter has come before this court for trial to the court on the claims of plaintiffs, John A. and Mary Will et al., against View Place Civic Association, defendants, Wolke and Hummer, Kokosing Construction Company ("Kokosing"), and other named individual party defendants, as well as Kokosing's counterclaim and cross-claim. This court has been fully apprised in the premises and has carefully considered the evidence presented, together with all applicable law.

Plaintiffs Alan Wolfson, Earl and Irma Wright, Tom and Brenda Andes, Rita Erdeljohn (Alexander Erdeljohn passed away during the pendency of this suit), John and Mary Will and Don and Elaine Nunneker are residents of an area of Springfield Township located in Hamilton County which is known as View Place. Prior to May 3, 1987, plaintiffs were all members of the View Place Civic Association (hereinafter "VPCA"). In January 1987, plaintiffs and other residents became aware of plans by Kokosing to remove more than one million cubic yards of dirt, soil and material for the construction of a portion of Cross-County Highway. Plaintiffs are owners of real estate adjacent to or near the site of the dig.

Plaintiffs brought this action against the VPCA and two of its purported officers, Daniel Hummer and Joseph Wolke. They allege that defendants Wolke and Hummer improperly entered into a written agreement as representatives of VPCA and its members with defendant Kokosing, the contractor who was to remove the dirt from the site. Kokosing accepted the representations of Hummer and Wolke on behalf of VPCA, and entered into the agreement.

Plaintiffs assert that the true majority will of the members of the VPCA, as evidenced by a vote at a March 29, 1988 meeting, was for the end use of the site to be a nature preserve, and that this vote was binding on Hummer and Wolke. From March 29, 1987 through early May 1987, defendants proceeded to negotiate an agreement regarding the site, which eventually included the end use of the property specifying baseball and soccer fields.

Plaintiffs claim defendants Hummer and Wolke misrepresented themselves as having the authority to bind the members of the VPCA to the terms of the agreement, and interfered with and injured plaintiffs' rights as property owners to protect their interest, causing damage to plaintiffs' property in the form of diminution in value of their real estate.

Plaintiffs claim that the diminution in value of their real property is caused by the nature of the end use specified by the agreement, ball fields, instead of the nature preserve which they say was desired by a majority of the VPCA members. Specifically, plaintiffs allege that ball fields are detrimental to the property value of plaintiffs' real estate by virtue of the increased noise, dust, traffic and other inconveniences. Plaintiffs further claim that their property value has been diminished by the position taken by Kokosing that plaintiffs are bound as property owners by the terms of the May 4, 1987 agreement, and that the contract deprives the plaintiffs of property rights. Plaintiffs bring this action seeking to have the agreement reformed in order to reflect what plaintiffs believe to be the true majority will of the residents of View Place or, in the alternative, to have the agreement voided and damages awarded.

Defendants VPCA, Hummer and Wolke allege that they were acting as the officers of VPCA with the authority to negotiate the contract with Kokosing as executed. These defendants further assert that, pursuant to the vote of the membership on May 3, 1987, the majority of the residents present at that meeting voted to accept the compromise proposed by Kokosing, which included approximately fifteen acres of untouched wooded land, five acres of a combination of grass and other vegetation, and, finally, seven acres to be utilized as a combination of ball fields and soccer fields located at the very bottom of the dig site.

Defendants Hummer, Wolke and VPCA further allege that plaintiffs have suffered no damage by their proximity to the dig site with an end use as set forth in the executed contract. These defendants further assert that the contract can be neither voided nor reformed based upon the facts of the case.

Kokosing has asserted a counterclaim against the plaintiffs. If the plaintiffs are not victorious in this case, and if this court determines that the May 4, 1987 contract binds the plaintiffs, then Kokosing asserts that the plaintiffs are in breach of that contract. Kokosing has also asserted cross-claims in this case. If the plaintiffs are successful, then Kokosing asserts that defendants Wolke and Hummer have committed either fraud or negligent misrepresentation in that they specifically warranted they had the authority to bind the members of VPCA.

It is a well-established and uniform rule that courts of equity have no authority to interfere with the action of voluntary and unincorporated associations where no property rights are involved. State, ex rel. Ohio High School Athletic Assn., v. Court of Common Pleas (1962), 173 Ohio St. 239, 19 O.O.2d 52, 181 N.E.2d 261. Nor will a court interfere with the management of such voluntary and unincorporated associations unless the officers are acting in excess of their powers or if collusion or fraud is claimed to exist on the part of the officers or a majority of the members. Id. In Ohio there is statutory power conferred upon unincorporated associations to enter into contracts. R.C. 1745.01.

The court first determines whether the acts of defendants Wolke and Hummer were within their authority with respect to VPCA, and whether the acts were fraudulent, collusive, or capricious. Plaintiffs claim that the defendants Wolke and Hummer were not elected to their positions as officers of the VPCA and therefore were not properly agents of that organization for purposes of entering into this agreement with Kokosing on behalf of VPCA. The evidence in the case did establish that neither Wolke nor Hummer was elected to his position during the critical time periods here. However, this lapse is not dispositive of the question of their authority to act on behalf of VPCA.

The evidence clearly established that these individuals were deemed by members of the association to be the officers and agents of the VPCA. The witnesses in essence testified that for pertinent periods both before and after the signing of the Kokosing-VPCA agreement they looked to both men to act on behalf of VPCA. They agreed it was their understanding that Wolke and Hummer were entering into negotiations on behalf of VPCA, and that they were unaware of any other individuals who had said responsibility. The evidence also established that the informal assumption of office was a standard practice within the VPCA; such is the case with many volunteer organizations. The evidence therefore failed to establish that the defendants Wolke and Hummer acted outside an implied grant of authority to serve as officers of this organization during the pertinent time period. Rather, it is clear that both gentlemen properly presented themselves to Kokosing as officers of the VPCA.

The next issue then for the court's consideration is whether defendants Wolke and Hummer acted beyond the scope of their authority to act. Plaintiffs assert that Wolke and Hummer's actions were not in conformity with the will of the majority of the association, and that proper procedure was not followed with respect to VPCA meetings and decisions. Plaintiffs have simply failed to meet their burden of proof with respect to this issue.

The evidence established that defendants Wolke and Hummer negotiated and met with representatives of Kokosing on behalf of the VPCA over a period of time. Kokosing offered concessions and a proposal at a March 27, 1987 meeting with View Place representatives, the results of which were presented to the VPCA at an advertised meeting on March 29, 1987. At this meeting it was intended and proposed that the membership would vote on whether a compromise should be reached with Kokosing or whether it should seek legal and injunctive relief. The majority of those present at the meeting voted to seek a compromise with Kokosing. Plaintiffs do not dispute the validity of this action by VPCA.

Toward the close of the meeting a "show of hands" occurred with respect to the preferred end use of the property in question. No discussion preceded the show of hands. While no actual count is reflected in the evidence, the evidence establishes that the majority of those expressing a preference chose a nature preserve end use as opposed to ball fields. Plaintiffs similarly do not dispute the manner in which this survey was taken.

At a meeting on April 27, 1987, a committee of ten reviewed the latest version of the Kokosing-VPCA contract. While there is some dispute in the evidence, it appears that most present agreed to present substantially the same proposal to the membership, but to defer a decision on the end use of the property.

The meeting on May 3, 1987 was billed in notices to the community as a meeting to vote on a final agreement with Kokosing. The evidence established that during the course of the meeting the membership rejected Hummer's original proposal that a discussion and vote on the end use of the property be deferred until a later date. Instead, those present intensely discussed the end use of the property at some length. The vote as to the agreement incorporating ball fields as an end use was forty to twenty-one in favor of the agreement.

These events contradict plaintiffs' position that the end use had been officially voted on and resolved at the March 29 meeting. Had this been the case, the end use would no longer be a subject of discussion by the committee of ten or the VPCA. In fact, substantial evidence, including testimony by Jan Gisslen, indicated that the end use of the property as ball fields was voted on by those present at the May 3, 1987 meeting, as part of the proposed agreement with Kokosing.

With respect to defendant Wolke, it must be noted that his actions with respect to the May 3, 1987 meeting were based entirely on information he received from other sources, as he was not present at the meeting. The only evidence in this case is that Wolke was informed that the association had voted to enter into the agreement with Kokosing; that agreement included the end use of the property as being for a ball field.

Plaintiffs have failed to meet the burden of establishing that defendants Wolke and Hummer acted in disregard of a mandate by the VPCA. Given, then, that the vote on May 3, 1987 endorsed the proposed agreement with Kokosing, defendants Wolke and Hummer acted well within their authority in executing the agreement on behalf of VPCA. By the same token, their acts were not arbitrary, capricious, collusive, fraudulent or in excess of their powers.

This court, therefore, will neither reform nor void the contract with respect to the VPCA and Kokosing. Because plaintiffs have failed to establish their claim, it is unnecessary for this court to reach the question of damages.

Plaintiffs also have raised the issue of whether those voting were properly qualified to vote at the May 3, 1987 meeting, and whether a quorum was present. No such objections were raised at this May 3 meeting. Failure to raise this issue operates as a waiver by plaintiffs of their right to assert such issues. Moreover, plaintiffs cannot assert lack of formality or eligibility with respect to certain votes and yet assert that the votes that went in their favor were valid when the same problems are attendant to those votes. Plaintiffs clearly have accepted this manner of operation at all pertinent times and they have, therefore, waived the issue.

It is noteworthy that there appears to be no requirement in the association's charter or constitution for a quorum for this kind of meeting. While the meeting may not have been conducted according to parliamentary procedure or Robert's Rules of Order, this court will not interfere with such actions of an voluntary and unincorporated association absent collusion, fraud or officers acting in excess of their powers. State, ex rel. Ohio State Athletic Assn., supra. There has been no such showing here.

The court next addresses the cross-claim of Kokosing against defendants Wolke and Hummer. As the court has already determined, the previous preference showing on March 29, 1987 for a nature preserve over a ball field was not controlling on Hummer or Wolke. Nor was it the understanding of Wolke, Hummer and others that this polling had disposed of the issue. Defendants Wolke and Hummer acted in good faith, and with an honest belief that they were carrying out the mandate of the VPCA in executing the agreement on behalf of VPCA. For these same reasons, the court finds that Kokosing has failed to meet its burden of proof with respect to its cross-claim against defendants Wolke and Hummer for fraud, deceit and negligent misrepresentations. This cross-claim is therefore dismissed.

Kokosing has filed a counterclaim against plaintiffs. It alleges anticipatory breach of contract, breach of contract with respect to the agreement not to oppose reclamation and development of the excavation site and not to file a lawsuit and, finally, for indemnification. A threshold issue is whether the plaintiffs as individuals are bound to the terms of the agreement.

It is undisputed that the plaintiffs in this case did not execute the agreement with Kokosing. Rather, Kokosing contends that the plaintiffs are bound to the agreement by theories of agency and ratification.

To constitute a valid contract there must be parties capable of contracting, a lawful subject matter, a sufficient consideration, a meeting of the minds of the parties, an actual agreement between the parties to do or to forbear doing the thing proposed in the agreement, and a compliance with the law in respect of any formal requisites which may pertain to the contract. It is fundamental that mutual consent is essential to every agreement, and that as a rule there can be no binding contract where there is no real consent. Feldman v. Roth (1932), 12 Ohio Law Abs. 121.

For a contract to be binding, the parties must have a distinct and common intention which is communicated by each party to the other, and this intention of the parties must refer to legal relations. In other words, to constitute a valid contract, there must be a meeting of the minds of the parties, and there must be an offer on the one side and an acceptance on the other. 17 Ohio Jurisprudence 3d (1980), Contracts, Section 17. No such meeting of the minds occurred here. Instead, the plaintiffs manifested an intent not to be bound by the contract terms. They not only did not sign the contract, but took steps such as letter writing, renouncing their membership in the VPCA, and seeking legal assistance.

Moreover, the Constitution of the United States provides that neither Congress nor the states may deprive any person of property without due process of law. See Fifth and Fourteenth Amendments to the United States Constitution. The Ohio Constitution prescribes that all men have certain inalienable rights, among which are those of acquiring, possessing, and protecting property (Section 1, Article I); that private property shall ever be held inviolate, but subservient to the public welfare (Section 19, Article I); that laws may be passed regulating the sale and conveyance of personal property (Section 2, Article XIII); and "that every person, for an injury done him in his land, goods, person or reputation, shall have remedy by due course of law, and shall have justice administered without denial or delay" (Section 16, Article I).

The agreement with Kokosing would deprive the plaintiffs of their due process rights. It provides that the "owners," several of whom constitute the plaintiffs here, under the agreement will "hold Kokosing harmless from and against any damages resulting from any action taken, filed or pursued by the VPCA, or the owners individually against Kokosing or concerning Kokosing's excavation, reclamation and/or development of the real estate, inasmuch as the right to take, file or pursue such action is waived by VPCA and the owners in paragraph 9 hereof."

In paragraph 9, the VPCA and "owners" specifically waive the right to sue for any legal or equitable relief. By these provisions, then, the owners relinquish a right to bring actions to protect property rights. Enforcement of these provisions against a plaintiff here who has not consented to this agreement would constitute a violation of that plaintiff's due process rights. The May 4, 1987 agreement is therefore unenforceable against plaintiffs on constitutional grounds. It is void with respect to the individual plaintiffs herein.

There being no enforceable contract between plaintiffs and Kokosing, Kokosing's counterclaim against plaintiffs for breach of contract fails. It is therefore dismissed.

Judgment is hereby entered for defendants Wolke, Hummer, VPCA, Gaiser, Scully, Schlosser, Neal, Beall and Bullock and against plaintiffs on plaintiffs' claim. It is entered for defendants Wolke and Hummer against defendant Kokosing's cross-claim. Judgment is entered for plaintiffs and against defendant Kokosing on Kokosing's counterclaim.

Costs are to be borne by each party.

Judgment accordingly.