IN THE SUPREME COURT OF OHIO

POMAR, L.P., et al.,

Appellants,CASE NO. 2014-1666

vs.

TIFF J. COOK., et al.

Appellees.

On appeal from theTenth District Court of Appeals(Case No. 13AP-430)

MEMORANDUM OF APPELLEES, TIFF J. COOK AND LESA D. COOK, INRESPONSE TO APPELLANTS' MEMORANDUM IN SUPPORT OF JURISDICTION

Patrick H. Boggs (0030124)Onda, LaBuhn, Rankin & Boggs Co., LPA35 North Fourth Street, Suite 100Columbus, Ohio 43215P: (614) 716-0500F: (614) 716-0511phb@olrblaw.comCounsel for Appellees, Tiff & Lesa Cook

Jeffrey M. Nye Kft-82-^247)Stagnaro, Sava & Patteoon Co., L^^

y ;;2623 Erie Avenue ,Cincinnati, OH 45208P: (513) 533-6714F: (513) 533-6711

a ^ ER" IORaimn ,sspfmicomCounsel foY Appellants; Buztddl^.i^WV4 sI_Group, Inc. d/b/a Gale Insulation, and MascoCorp.

W. Charles Curley (0007447)Weston Hurd LLP10 W. Broad Street, Suite 2400Columbus, Ohio 43215P: (614) 280-0200F: (614) 280-0204wcurley(a^westonhurd. comCounsel for Appellant, Colonial Heating &Cooling Co., Inc.

Cari Fusco Evans (0061864)Fischer, Evans & Robbins, Ltd.

4505 Stephen Circle NW, Suite 100Canton, Ohio 44718P: (330) 244-0997F: (330) 244-8966cfevans@fer-law.netCounsel for Appellant, Ratcliff-MidkiffMasonry,

Michael J. Anthony (0066447)Anthony Law, LLC3II3 N. Front Street(/̂lumbus, Ohio 43215Pf (614) 340-0011

nsel for Appellants, Interior SurfacesBuilders Flooring, Inc.

l^evin R. Bush (0029452)^teven G. Carlino (0073734)Weston Hurd LLP10 West Broad Street, Suite 2400Columbus, OH 43215P: (614) 280-0200F: (614) 280-0204kbush(a^westonhurd. comscarlino(c^westonhurd.comCvunsel for Appellant, Remedics, Inc. d/b/aRemedics Restoration & Remedics RestorationCarolinas, LLC

Andrew J. Mollica (0041929)Mollica Gall Sloan & Sillery Co., LPA35 North College Street

PO Drawer 958Athens, Ohio 45701P: (740) 593-3357F: (740) 594-8557mollicaa(u7mgss.comCo-Counselfor Appellant, Pomar, L.P.

Jon R. Philbrick (0003170)1188 Leicester PlaceColumbus, Ohio 45701P/F: (614) 468-1789Brick 1111 @aol.comCo-Counsel for Appellant, Pomar, L.P.

TABLE OF CONTENTS

EXPLANATION OF WHY THIS IS NOT ACASE OF PUBLIC OR GREAT GENERAL INTEREST ..............................................................1

STATEMENT OF THE CASE AND FACTS .................................................................................1

ARGUMENT IN OPPOSITION TO PROPOSITIONS OF LAW ..................................................4

Proposition of Law No. 1: Claims for failure to construct a residentialdwelling in a workmanlike manner which arise from a contract to provideconstruction services in the future are subject to the statute of liniitations forbreach of contract claims set forth in R.C. §2305.06, as required by thisCourt in KishmaYton v. William Bailey Constr., Inc., 93 Ohio St.3d 226 (2001).Conversely, claims for failure to construct a residential dwelling in aworkmanlike manner which arise from the purchase of an already-completed structure are subject to the negligence statute of limitations setforth in R.C. §2305.09, as required by this Court in Velotta v. Leo PetronzioLanclscaping, Inc., 69 Ohio St.2d 376 (1982).

CONCLUSION ........................................................................................... ......................................8

CERTIFICATE OF SERVICE .................................................................................................. ..10

EXPLANATION OF WHY THIS IS NOT ACASE OF PUBLIC OR GREAT GENERAL INTEREST

This case does not present a question of public or great general interest. Appellants argue

that this Court has created conflict and inconsistency in the law by applying the negligence

statute of limitations set forth in R.C. §2305.09(D) to claims for failure to perform in a

workmanlike manner which arise from the purchase of an already-constructed home, while

applying the statute of limitations for breach of contract claims set forth in R.C. §2305.06 when

the failure to perform in a workmanlike manner arises from a contract to provide future

construction services. As a result, Appellants argue that all claims for failure to perform in a

workmanlike manner should be held to (1) arise in tort and, (2) be subject to the statute of

limitations set forth by R.C. 2305.09(D).

Appellants have attempted to create conflict where none exists. This Court and Ohio's

appellate-level courts have been consistent in following the precedent set by this Court in Velotta

v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376 (1982), and Kishmarton v. William Bailey

Constr., Inc., 93 Ohio St.3d 226 (2001). Ohio courts have consistently recognized that Velotta

controls when they are faced with a claim for failure to perform in a workmanlike manner arising

from the purchase of an already-constructed home, while Kishnaar•ton controls when the claim

arises from a contract to provide construction services in the future. In Kishmarton, this Court

discussed Velotta and explained why a builder's duty to perform in a workmanlike manner for

construction services not yet rendered arises under the contract, rather than by operation of law;

the duty to build in a workmanlike manner is part of the consideration of the contract.

STATEMENT OF THE CASE AND FACTS

Appellees and DiYanni Homes ("DiYanni") entered into a real estate purchase and

construction agreement for the construction, purcliase and sale of Appellees' home under

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DiYanni's Build Through Investor Program. In order to fulfill its obligations under the

Agreement, DiYanni entered into Subcontractor Agreements with Appellants to provide labor

and materials to help construct Appellees' home. Under each of its Subcontractor Agreements,

Appellants expressly agreed to perform all labor in a first class, workmanlike manner and that all

labor and materials would be of good quality and free from faults or defects. Upon the breach of

a Subcontractor Agreement, DiYanni was entitled to recover all costs incurred in the

enforcement of DiYanni's rights under the Subcontractor Agreements, including attorney's fees,

or in remedying the subcontractor's breach.

A number of serious problems arose during construction as a result of occurrences, poor

workmanship, negligence, and the use of substandard materials by Appellants. The third-party

investor financing the construction refused to move forward with the transaction due to these

problems, and Appellees were forced to find a new lender to finance the purchase of their home.

Appellees obtained new financing and entered into a revised real estate purchase and

construction agreement with DiYanni (the "Purchase Agreement"). Pursuant to the Purchase

Agreement, DiYanni and Appellants were to remedy the defects and complete construction of

Appellees' home. Appellees closed on the sale of their home on August 12, 2005; however, it

was later discovered that DiYanni and Appellants failed to fix the defects and properly complete

construction of the home.

Appellees were forced to file suit against DiYanni to recover the damages they incurred

as a result of DiYanni's failure to complete construction of their horne in a workmanlike manner.

DiYanni answered the Complaint and filed a third-party complaint against Appellants, alleging

claims for breach of contract, breach of warranty, promissory estoppel, failure to perforni in a

workmanlike manner, negligence per se and negligent hiring, retention and supervision.

Appellees ultimately agreed to settle their dispute with DiYanni and dismissed the lawsuit. In

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return, DiYanni assigned all of its claims against Appellants to Appellees, including its contract

claims against Appellants.

Appellees subsequently filed a Complaint in the Franklin County Court of Common Pleas

(the "Trial Court"), Case No. 2012 CV 02943, in which they asserted the claims that were

assigned to them by DiYanni against Appellants (the "Lawsuit"). This included the contract

claim for failure to build in a workmanlike inanner; an express term in each of DiYanni's

contracts with Appellants. T'he Trial Court granted Motions for Summary Judgment and

Judgment on the Pleadings filed by the Appellants, reasoning that Appellees' claims for breach

of contract and failure to perform in a workmanlike manner arose in tort and, therefore, were

subject to the four-year statute of limitations set forth in R.C. 2305.09(D) which expired prior to

Appellees' filing of the Lawsuit.

Appellees appealed, setting forth the following assignment of error "[t]he Trial Court

erred in ruling that [Appellee's] claims for breach of contract and failure to perform in a

workmanlike manner are subject to a four-year statute of limitations."I The Tenth District Court

of Appeals (the "Appellate Court") sustained Appellees' assignment of error, citing the

distinction in how this Court has treated claims for failure to perform in a workmanlike manner

arising from the purchase of an already-constructed home versus those claims which arise from a

contract to provide future construction services. Specifically, the Appellate Court relied upon

Kishmarton when it held as follows:

Here, [Appellees'] claims for breach of contract and failure to perform in aworkmanlike manner arise out of the contractor agreements entered between thegeneral contractor (DiYanni) and its subcontractrs ([Appellants]) for futureconstruction services, and we conclude that the nature of the liability is excontractu, governed by the statute of limitations for contracts. We thereforeconclude that the trial court erred in applying the four-year statute of limitations

'Appellees set forth three assignments of error; however, this is the only assignment relevant tothis appeal. 3

to [Appellee'] claims for breach of contract and failure to perform in aworkmanlike manner.

Appellants now seek review of the Appellate Court's decision herein.

ARGUMENT IN OPPOSITION TO APPELLANTS' PROPOSITION OF LAW

Proposition of Law No. 1: Claims for failure to construct a residentialdwelling in a workmanlike manner which arise from a contract to provideconstruction services in the future are subject to the statute of limitations forbreach of contract claims set forth in R.C. §2305.06, as required by thisCourt in Kishmarton v. William Bailey Constr., Inc., 93 Ohio St.3d 226 (2001).Conversely, claims for failure to construct a residential dwelling in aworkmanlike manner which arise from the purchase of an already-completed structure are subject to the negligence statute of limitations setforth in R.C. §2305.09, as required by this Court in Velotta v. Leo PetronzioLandscaping, Inc., 69 Ohio St.2d 376 (1982).

Two things can be made abundantly clear via a brief review of Oliio law on this subject:

(1) there is no conflict in the law, and (2) the law appropriately distinguishes the nature of the

two claims.

In Lloyd v. William Fannin Builders, Inc. (1973), 40 Ohio App.2d 507, a vendee entered

into a contract with a builder-vendor for the purchase of a dwelling to be constructed by the

builder-vendor in the future. The vendee subsequently filed suit alleging that the builder-vendor

failed to construct the dwelling in a workmanlike manner. Id. In granting the builder-vendor's

motion to dismiss, the trial court held that it did not have jurisdiction to hear the vendee's case

because it was filed outside the four-year statute of limitations imposed on tort actions by R.C.

2305.09. Id., at 508. In overruling the trial court's dismissal, Ohio's Tenth District Court of

Appeals held, in part, that:

The duty imposed on a builder-vendor to build structures in a workmanlikemanner arises out of an implied bargain, an implied provision, an impliedcondition, or an implied term of the sale; whatever the name which is attached tosuch duty, it is a duty which is implied in law and comes from the contractbetween the builder-vendor of the real-property structure and the vendee. Wefind that it was error on the part of the trial court to apply the four-year statute oflimitations set forth in R.C. 2305.09.

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Id., at 510. Rather, the vendee's claims arose ex contractu and were subject to the statute of

limitations imposed by R.C. 2305.06. Id.

Nine years later in Velotta, this Court held that an action brought by a vendee against a

builder-vendor of a completed residence for failure to construct in a workmanlike manner arises

ex delicto and, therefore, is subject to the four-year statute of limitations set forth by R.C.

2305.09. This Court clearly realized the distinction it had just drawn with Lloyd, however,

because it included a footnote which cited to Lloyd and limited the application of its decision in

Velotia to only those instances involving claims arising out of the purchase of completed

residence. Id., at 378. Specifically, this Court stated in footnote 2 that:

We express no opinion as to whether a different result would be reached were thecontract herein one to build a residence in the future or one to complete a partiallyconstructed residence. See, e.g., Lloyd v. William Fannin Builders, Inc. (1973),40 Ohio App.2d 507, 320 N.E.2d 738, where the parties had entered into acontract for the sale of a residence to be constructed by the builder-vendor, andthe court held the obligation to construct in a workmanlike manner arises excontractu.

Id.

A litany of appellate-level cases highlighting the distinction created by Velotta ensued.

In Barton v, Ellis (1986), 34 Ohio App.3d 251, 253, the Tenth District Court of Appeals noted

that "[a]pplication of this standard has resulted in a distinction between the sale of a completed

residence on the one hand, and the contracting for future construction services on the other hand

(e.g. the sale of partially completed residences with some work to be completed, remodeling, or

modification of existing structures)." "Absent express or implied warranties as to the quality or

fitness of work performed, the liability of a builder-vendor of a completed structure for failure to

exercise reasonable care to perform in a workmanlike manner sounds in. tort, and arises ex

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delicto." Id. "By contrast, in the provision of future services, liability arises ex contractu as an

implied bargain." Id.

In Elizabeth Gamble Deaconess Home Assoc. v. Turner Constr. Co. (1984), 14 Ohio

App.3d 281, a vendee filed suit against a builder-vendor alleging several different claims which

arose from the builder-vendor's alleged failure to perform in a workmanlike manner. Id. The

lawsuit was filed fourteen years after the builder-vendor completed construction of the structure,

and the First District Court of Appeals was tasked with determining the appropriate limitations

periods governing the various claims asserted by the vendee. Id. The Court stated that "those

claims that arise ex contractu are governed by the fifteen-year limitation of R.C. 2305.06, and

those that arise ex delicto are barred by R.C. 2305.09(D) . . ." Id., at 285. The Court held that

"[t]he claims that are clearly ex contractu on the face of the complaint are: the first, for breach ..

. of the construction contract; the second, for breach of ... express warranties ...; and the fifth,

for breach ... of the architectural contract." Id. Meanwhile, "[t]he claims which are clearly ex

delicto on the face of the complaint are: the fourth, for negligent construction ...; and the sixth,

for negligent supervision . . ." Id. The Court cited Velotta in ruling that the negligence claims

were time-barred, but noted that Velotta was not directly on point because it dealt with the

purchase of a completed residence. Id., at 286.

The loop was finally closed by this Court in Kishmarton. In distinguishing suits arising

from the purchase of a completed residence from those resulting from a contract for the purchase

and construction of a home, the Supreme Court stated that:

In [Velotta], we held that `an action by a vendee against the builder-vendor of acompleted residence for damages proximately caused by failure to construct in aworkmanlike manner using ordinary care - a duty imposed by law - is an actionin tort.' We specifically did not address the nature of an action by a vendeeagainst the builder-vendor for breach of a contract to build a residence in thefuture. Today, we close the loop by answering the first certified question and

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holding that such actions arise ex contractu. Doing so does little more thanacknowledge the obvious.

Id., at 228; Citing Velotta.

This Court last entertained this issue in Jones v. Centex Homes (2012), 132 Ohio St.3d 1.

Like Velotta, Centex involved claims for failure to perform in a workmanlike manner which

arose from the purchase of an already-constructed home. Id. As such, this Court relied upon

Velotta in holding that the claim was subject to the four-year statute of limitations set forth by

R.C. 2305.09(D). Id., at 4-5. In Centex, this Court did not even mention Kishmarton because

Kishmarton had no application therein.

A. There Is No Conflict in the Law

The foregoing should make clear that this Court has created two separate lines of cases in

Velotta and Kishmarton. This Court and Ohio's appellate-level courts have been consistent in

their observance of Velotta and Kishmarton, and the undersigned is aware of no opinions which

express concern over the alleged contradictions and inconsistencies asserted in Appellants'

Memorandum in Support of Jurisdiction. Moreover, this Court's ruling in Centex does not

contradict or run contrary to Kishmarton. Centex involved the purchase of an already-

constructed home, while Kishmarton involved a contract to provide construction services in the

future. Appellants have attempted to create conflict where none exists.

B. This Court Should Not Change the Current State of the Law

Appellants' Memorandum In Support of Jurisdiction also sets forth the following

proposition of law:

All claims pursued by a vendee-buyer against a vendor-seller relating to theconstruction of a residential dwelling for deficiencies in workmanship are actionsin torts and are governed by the four-year statute of limitation set forth in R.C.2305.09(D).

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Appellants, through their proposition, completely ignore the fact that this Court has already

explained the need for this distinction in its Kishmarton holding. Ohio's appellate-level courts

have applied the distinction in Velotta and Kishmarton without error. Accordingly, there is no

reason to adopt Appellants' proposition and deviate from this well-settled area of Ohio law.

Nowhere is the need for the distinction more apparent than in the facts of this case. In

our case, Appellees filed suit against Appellants based upon contracts which expressly state that

Appellants' work must be performed in a first class, workmanlike manner and be free from faults

or defects. The terms of the contracts will ultimately govern whether Appellants failed to

perform in a workmanlike manner. Accordingly, Appellees' claims for failure to perform in a

workmanlike manner arise out of those contracts and are, therefore, governed by the statute of

limitations set forth in R.C. §2305.06 for breach of contract claims. "It can hardly be otherwise."

See Kishmarton, at 228-229.

CONCLUSION

The foregoing should make clear that there is no conflict or inconsistency in the law as it

stands today. Appellants' statements to the contrary are erroneous misstatements of this well-

grounded area of Ohio law. The issue proposed for review by Appellants herein does not present

a question of public or great general interest. In reality, it presents a question which has already

been reviewed by this Court on multiple occasions. Accordingly, Appellees respectfully request

that this Court decline jurisdiction over this case.

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Respectfully Submitted,

ONDA, LABUHN, RANKIN &BOGGS CO., LPA

/s/Patrick H. BoQgsPatrick H. Boggs (0030124)Email: phb@olrblaw.conz35 North Fourth Street, Suite 100Columbus, Ohio 43215-2511Phone: 614/716-0500Fax: 614/716-0511Counsel foN Appellees, Tiff and Lesa Cook

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CERTIFICATE OF SERVICE

The undersigned hereby certifies that a true copy of the forgoing was served via e-mail

on this 28th day of October, 2014, upon the following:

Jeffrey M. Nye, Esq.Stagnaro, Sava & Patterson Co., LPA2623 Erie AvenueCincinnati, OH 45208jmn sspfirm.comCounselfor Appellant, Builders Services Group, Inc. dbaGale Insulation and Masco Corporation

W. Charles Curley, Esq.Weston Hurd, LLP10 W. Broad Street, Suite 2400Columbus, Ohio 43215wcurley@westonhurd.comCounselfor Appellant, Colonial Heating & Cooling Co., Inc.

Cari Fusco Evans, Esq.Fischer, Evans & Robbins, Ltd.4505 Stephen Circle NW, Suite 100Canton, Ohio 44718cfe.vans@fer-law.netCounselfor Appellant, Ratcliff-Midl4iffMasonry, Inc.

Vincent P. Zuccaro, Esq.Anthony Law, LLC383 N. Front Street, LLColumbus, Ohio 43215mj ananthonylawllc.comCounselfor Appellants, Interior Surfacesand Builders Flooring, Inc.

Kevin R. Bush, Esq.Weston Hurd LLP10 West Broad Street, Suite 2400Columbus, OH 43215kb u sh (a_^ we s to nhurd. c o mCounsel f'ar Appellant, Remedics, Inc. dbaRenzedics Restoration & Remedics Restoration Carolinas, LLC

Andrew J. Mollica, Esq.Mollica Gall Sloan & Sillery Co., LPA35 North College Street

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PO Drawer 958Athens, Ohio 45701P: (740) 593-3357F: (740) 594-8557mo l licaaa,mgss. comCo-Counsel foN Appellant, Pomar, L.P.

Jon R. Philbrick, Esq.1188 Leicester PlaceColumbus, Ohio 45701P/F: (614) 468-1789Brick1111Oa,aol.comCo-Counsel for Appellant, Pomar, L.P.

Is! Patrick H. Bo

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