Dispute over parking spaces
by Michael Blahy
As part of a project to improve I‑70 in Columbus Ohio, Ohio Department of Transportation (“ODOT”) found itself promising to exchange property which didn’t belong to them. ODOT required property belonging to Ice House Ventures, LLC, Lion Management Services, LLC, and Smokestack Ventures, LLC (“IHV”) for the project. IHV chose to have a court decide on compensation. A few days prior to a jury trial, a two‑part agreement was reached by ODOT and IHV. Part one was a payment to IHV of $900,000.00 and part two was “Parking Mitigation Property”.
“ODOT shall provide IHV with marketable fee simple title” to the Parking Mitigation Property and that the property “shall be conveyed to [IHV] free and clear of all limitations of access or other liens and encumbrances, excepting only such restrictions and easements of record which shall not unreasonably interfere with use of the Parking Mitigation Property as a parking lot sufficient to hold twelve (12) parking spaces as generally depicted in [a parking plan attached to the agreement as an exhibit]”.
The agreement was entered as a judgement, and it contained a clause:
“It is further ORDERED that, within one year after the date hereof: (1) if ODOT fails to convey marketable fee simple title to the Parking Mitigation Property as provided herein; or (2) if ODOT fails to modify its plans for [the improvements to Interstate 70] to allow for the construction of a parking lot on the Parking Mitigation Property in accordance with the Parking Plan; or (3) if all permits and/or approvals required for IHV to construct a parking lot on the Parking Mitigation Property in accordance with the Parking Plan have not been obtained; then the Court shall retain jurisdiction to determine the damages due to IHV for the failure of ODOT to deliver this portion of the consideration for ODOT’s appropriation of IHV’s property”.
ODOT had a problem. The City of Columbus owned that small parcel of land, and refused to transfer the property.
In April 2019, IHV started proceedings to enforce the agreement, and a trial was held two months later. The court heard numerous appraisals for the parcel of land owned by the city, but the court decided:
“The issues are 1) did ODOT breach the settlement, and if so, 2) what is the value of twelve (12) parking spaces in the Brewery District, because that is what ODOT promised to IHV. Those spaces are what IHV expected, and the monetary damages for the value of those twelve (12) spaces is what IHV is entitled to under Ohio law”.
The court ordered a $900,000 judgment.
ODOT appealed to the Tenth District Court of Appeals, saying “The trial court erred in enforcing settlement because there was no meeting of the minds on a material term of settlement” among the four assignments of error. ODOT argued that the word “damages” meant eminent‑domain damages, whereas IHV defined the word as contract damages. The Court of Appeals decided since there was no definition and no meeting of the minds on the meaning of “damages”, the trial court erred by finding there was an enforceable settlement agreement in the first place. It ordered a trial “as any appropriation proceeding would be tried—on the issues of compensation for the property taken and damages to the residue”.
IHV appealed to the Supreme Court of Ohio arguing:
“[1.] When parties enter into a written settlement agreement, a meeting of minds is presumed. That presumption may only be rebutted by competent evidence, not after‑the‑fact argument by counsel.
“[2.] After a written agreement is memorialized in a court order, a party may not collaterally attack the order by claiming that no meeting of the minds exists. A trial court has the inherent authority to interpret and enforce its own order.
“[3.] A party alleging a breach of a settlement agreement in an eminent domain matter is entitled to its expectation damages.”
ODOT tried using Rulli v FanCo as a precedent arguing that in their agreement the terms were not “reasonably certain and clear”, and the court found the agreement not enforceable.
The Ohio Supreme Court ruled:
“We find Rulli wholly distinguishable from this case. This court described the facts in Rullias follows:
Though upon first examination, the settlement terms as read into the record on June 23, 1993, appear reasonably clear, the parties . . . subsequently . . .disputed nearly every major element of the purported agreement. Therefore, the language read into the record at the initial hearing reflects, at best, merely an agreement to make a contract. . . . [T]he record in this case demonstrates that ODOT and IHV clearly intended to enter into, and in fact entered into, a binding settlement agreement.”
“Because a breach of a contract is not an inevitability, it cannot follow that a definition of “damages” is an essential element of a contract.”
“If a contract’s terms are properly performed, the question of damages never arises. Indeed, a valid contract may exist and bind the parties without its mentioning damages at all. Thus, we reject ODOT’s argument that ‘Rulli’ instructs that the settlement agreement here was not a valid contract simply because the term “damages” was not defined therein.”
ODOT tried to use an old English case as a precedent, where the sale of cotton from Bombay on a ship name “Peerless” was agreed upon prior to its arrival. It just happened that two ships with that name sailed the route a few months apart with cotton on board. When signing the contract, the buyer and seller were mistaken, thinking of the other ship. ODOT argued that the interpretation of the “damages” definition can be a similar “mistake”.
The Supreme Court said:
“ODOT points to no evidence showing that it had a different understanding of the term “damages” at the time the agreement was made in a way that has a material effect on the parties’ agreed‑upon settlement obligations. The point in time at which a different understanding of a term occurs is important. The court of appeals determined that the parties’ “fundamentally divergent understandings” of the term “damages” was apparent based on the arguments presented at the hearing on the motion to enforce the settlement agreement, during which ODOT attempted to minimize its damages exposure while IHV attempted to maximize its potential recovery. This after‑the‑fact disagreement about how to construe the term “damages” does not support a finding that the parties made a material mistake about a basic assumption on which the contract was made”.
“ [H]ad the terms of the contract been fully performed, the question of damages never would have arisen. . . . Any uncertainty regarding the meaning that each party assigned to the term “damages” in the agreement is irrelevant, because the essential elements of the parties’ agreement were clear”.
“ [T]he agreement is clear that the parties left the question of damages to the trial court, if the question arose. The agreed judgment entry on the settlement plainly states: “[T]he Court shall retain jurisdiction to determine the damages due to IHV for the failure of ODOT to deliver this portion of the consideration[, i.e., the Parking Mitigation Property,] for ODOT’s appropriation of IHV’s property.”
“Accordingly, ODOT has not shown by clear and convincing evidence that … any lack of understanding about the term “damages” in the agreement renders it unenforceable”.
The Ohio Supreme Court concluded:
“Because we conclude that the settlement agreement is enforceable, we reverse the judgment of the Tenth District holding otherwise”.
The case was remanded to the Tenth District Court of Appeals for it to address ODOT’s remaining three assignments of error.
(MARCHBANKS,DIR.OF THE OHIO DEPARTMENT OF TRANSPORTATION v.ICE HOUSE VENTURES,L.L.C.,ET AL. (SUPREME COURT OF OHIO, SLIP OPINION NO.2023‑OHIO‑1866))
Decision: June 2023
Published: June 2023
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