[Cite as J & D Rack Co., Inc. v. Kreimer, 194 Ohio App.3d 479, 2011-Ohio-2358.]




                IN THE COURT OF APPEALS
            FIRST APPELLATE DISTRICT OF OHIO
                 HAMILTON COUNTY, OHIO



J & D RACK COMPANY, INC.,                        :         APPEAL NOS. C-100476
                                                                       C-100496
        Appellant and                            :         TRIAL NO. A-0904109
        Cross-Appellee,
                                                 :         D E C I S I O N.
  v.
                                                 :
KREIMER ET AL.,
                                                 :
        Appellees and
        Cross-Appellants.                        :




Civil Appeals From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: May 18, 2011


Eric C. Deters & Associates, P.S.C., and Geoffrey P. Damon, for appellant and cross-
appellee.

Murray, Murphy, Moul & Basil, L.L.P., and Joseph F. Murray, for appellees and
cross-appellants.




Please note: This case has been removed from the accelerated calendar.
                           OHIO FIRST DISTRICT COURT OF APPEALS




           Per Curiam.

           {¶1}     These appeals arise out of a dispute over a land-improvement contract

between J & D Rack Company, Inc. (“Rack Co.”) and Timothy and Melissa Kreimer.

Following a bench trial, the Hamilton County Court of Common Pleas held Rack Co.

liable for breaching its contract with the Kreimers and violating Ohio’s Consumer Sales

Practices Act (“CSPA”).1 The court also awarded some, but not all, of the attorney fees

requested by the Kreimers. We affirm that judgment.

           {¶2}     After considering the “substantially different stories” of the parties, the

trial court found the following facts. The Kreimers purchased land on Gaines Road in

Hamilton County, Ohio, intending to make the property their permanent home. They

have not yet resided there, but the Kreimers have used the property, including a lake

situated on it, for their own recreational purposes. In addition, although a tenant rents

a house on the property and cares for approximately one acre around that house, the

Kreimers have reserved the rest of the property for their own use.

           {¶3}     Seeking to expand their lake, the Kreimers hired Rack Co. to perform

excavation work for the project, and they agreed to pay the company up to $40,000 on

an installment plan. But one month later, and before the project was completed, John

Rack of Rack Co. informed Timothy Kreimer that the company expected $67,000 for

the work performed up to that point. The Kreimers balked at the demand and ended

their relationship with the company.            They ultimately paid a second contractor

$16,649.02 to finish the project.

           {¶4}     The trial court concluded that Rack Co. had committed an anticipatory

breach of contract and that it had violated the CSPA. Nevertheless, to place the



1   R.C. 1345.01 et seq.


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Kreimers in as good a position as they would have been in but for the breach, the trial

court ordered the couple to pay Rack Co. $23,350.98, the maximum contract price less

the cost to complete the project after the breach. The court further ordered Rack Co. to

pay the Kreimers $5,000 in noneconomic damages and $26,675 in attorney fees. The

latter amount, however, did not include the Kreimers’ paralegal expenses.                 These

appeals followed.

                                     Appeal No. C-100476

          {¶5}     In its first assignment of error, Rack Co. asserts that the trial court erred

in holding the company liable for violating the CSPA, which prohibits suppliers from

committing any “unfair or deceptive act or practice in connection with a consumer

transaction.”2 We are not persuaded.

          {¶6}     The company first argues that its agreement with the Kreimers was not

a consumer transaction. Under the CSPA, a “consumer transaction” is “a sale, lease,

assignment, award by chance, or other transfer of an item of goods, a service, a

franchise, or an intangible, to an individual for purposes that are primarily personal,

family, or household, or solicitation to supply any of these things.”3 In contrast, the

purchase of goods or services for primarily business reasons is not a consumer

transaction.4 We decide whether purposes are primarily personal, family, or household

by examining the “objective manifestations” of the buyer at the time of the agreement

regarding how he or she intended to use the goods or services purchased.5




2   R.C. 1345.02(A).
3   R.C. 1345.01(A).
4   Ford Motor Credit Co. v. Ryan, 189 Ohio App.3d 560, 2010-Ohio-4601, 939 N.E.2d 891, at ¶ 77.
5Giffin v. Crestview Cadillac, 10th Dist. No. 09AP-278, 2009-Ohio-6569, at ¶ 22, quoting Tomes
v. George P. Ballas Leasing, Inc. (Sept. 30, 1986), 6th Dist. No. L-85-359.


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                          OHIO FIRST DISTRICT COURT OF APPEALS



           {¶7}    Based on the Kreimers’ objective intent at the time of contracting, we

hold that the lake project was primarily for personal, family, or household purposes.

Although the property on which the lake was situated produced rental income for the

Kreimers, the family reserved much of the land for their own recreational use, and they

even used the lake while the rental house was occupied. Furthermore, the property

produced rental income of only $950 per month. Meanwhile, the Kreimers’ mortgage

payment on the property was $2,500 per month. When viewed in light of the $40,000

project cost, the relatively low rental income indicates that the project was not intended

to benefit the property’s rental value, but rather to enhance the Kreimers’ personal use.

We, therefore, hold that the agreement was a consumer transaction.

           {¶8}    Rack Co. also argues that even if a consumer transaction occurred, the

CSPA does not apply to contracts to improve land. Although the Ohio Supreme Court

has held that the statute does not apply to “pure” real estate transactions,6 our own

precedent demonstrates that it does apply to land-improvement contracts as long as

they are consumer transactions.7

           {¶9}    In Williams v. Edwards, the defendant construction company needed a

site to dump fill dirt from an excavation project. The plaintiffs allowed the company to

use their residential property, and in exchange, the company agreed to replace the

plaintiffs’ driveway. When the work was not performed to the plaintiffs’ satisfaction,

they sued the company under the CSPA. In holding that the CSPA was applicable, we

determined that “contracts for improvements to one’s residential property are covered

by the CSPA, as they involve the sale or transfer of services for personal use.”8



6   Brown v. Liberty Clubs, Inc. (1989), 45 Ohio St.3d 191, 193, 543 N.E.2d 783.
7   Williams v. Edwards (1998), 129 Ohio App.3d 116, 717 N.E.2d 368.
8   Id. at 122.


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                        OHIO FIRST DISTRICT COURT OF APPEALS



          {¶10}    Because the agreement between Rack Co. and the Kreimers was a

consumer transaction, we hold that the CSPA was applicable to this case. We therefore

overrule Rack Co.’s first assignment of error.

          {¶11}    In its second assignment of error, Rack Co. contends that the trial court

erred in coming to “inconsistent verdicts.” Specifically, the company complains that the

court had “no legal rationale” to award damages to both parties, but to award attorney

fees only to the Kreimers. This argument is without merit.

          {¶12}    The trial court held that Rack Co. had (1) committed an anticipatory

breach of its contract with the Kreimers by demanding $67,000 before completing the

project and (2) violated the CSPA by materially underestimating the cost of the project

and failing to provide both certain disclosures required by statute and a writing that

detailed the installment plan. To restore the Kreimers to their expected position under

the contract, the court ordered the couple to pay Rack Co. the difference between the

maximum contract price and their cost to complete the project. The court also awarded

damages and attorney fees specifically provided by the CSPA.9

          {¶13}    These entirely consistent awards were based on independent holdings.

These holdings, in turn, relied on distinct events separated by over a month. We know

of no legal rationale that would preclude such a result, and therefore, we overrule Rack

Co.’s second assignment of error.

          {¶14}    In its third assignment of error, Rack Co. argues that the trial court

erred by not ordering the Kreimers to elect their remedy. The record, however, shows

otherwise.

          {¶15}    When a supplier has committed an unfair or deceptive act in connection

with a consumer transaction, the consumer may “rescind the transaction or recover the


9   See R.C. 1345.09.


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                           OHIO FIRST DISTRICT COURT OF APPEALS



consumer’s actual economic damages plus an amount not exceeding five thousand

dollars in noneconomic damages.”10 In addition, when the unfair or deceptive act is a

violation of the Home Solicitation Sales Act (“HSSA”),11 the consumer may elect to

cancel the transaction.12 Although rescission must occur “before any substantial change

in condition of the subject of the consumer transaction,”13 courts have allowed

cancellation even after substantial performance.14 Although a party may file suit under

different theories of recovery, the party must elect its remedy before trial.15

           {¶16}    At trial, the Kreimers claimed that Rack Co. had violated the CSPA by

(1) materially underestimating the cost of the lake project, (2) failing to provide

information and disclosures required by Ohio Adm.Code 109:4-3-05(A)(1), (3) failing

to put the installment agreement in writing as required by R.C. 1317.02, and (4)

violating the HSSA by not informing them of their right to cancel the transaction.

           {¶17}    Before their case-in-chief, the Kreimers elected the following:

           {¶18}    “[KREIMERS’ COUNSEL]: If the Court determines that the Home

Solicitation Sales Act is applicable, our choice of remedy is cancellation.

           {¶19}    “THE COURT: Okay.




10   R.C. 1345.09(A).
11 R.C. 1345.21 et seq. See R.C. 1345.28 (“Failure to comply with sections 1345.21 to 1245.27 of the
Revised Code constitutes a deceptive act or practice in connection with a consumer transaction in
violation of R.C. 1345.02 of the Revised Code”).
12   R.C. 1345.22 and 1345.23.
13   R.C. 1345.09(C)(1).
14 See, e.g., McGill v. Image Scapes, L.L.C., 9th Dist. No. 10CA0043-M, 2010-Ohio-6246
(allowing cancellation after new lawn and landscaping was installed); Kamposek v. Johnson, 11th
Dist. No. 2003-L-124, 2005-Ohio-344 (allowing cancellation after significant construction on a
house). But see Kamposek at ¶ 33 (“[W]hile there is no ‘clean hands’ provision in the HSSA, we
caution against the scenario where a buyer enters into a contract solely to take advantage of the
seller’s possible failure to provide notice of the right to cancel. The HSSA is intended to be a
‘shield’ for the consumer, not a ‘sword’ ”).
15   Cas. Restoration Servs., L.L.C. v. Jenkins, 1st Dist. No. C-060983, 2007-Ohio-5131, at ¶ 8.


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                          OHIO FIRST DISTRICT COURT OF APPEALS



           {¶20}     “[KREIMERS’ COUNSEL]: If the Court determines that the Home

Solicitation Sales Act is inapplicable, we believe that we have viable claims under —

meritorious claims under the Consumer Sales Practices Act for which we are seeking

economic damages, noneconomic damages and attorney’s fees.”16

           {¶21}     Thus, the Kreimers elected cancellation if the trial court found Rack Co.

liable for violating the HSSA, but damages if the court found the company liable for

violating the CSPA, but not the HSSA.

           {¶22}     We have previously held that a party making a claim under the CSPA

through a violation of the HSSA could not elect to pursue damages under the CSPA

while retaining the right to cancel the contract under the HSSA.17 But in this case, the

Kreimers did not elect to pursue damages and retain the right to cancel. Instead, they

sought to cancel if the trial court accepted one of their theories of liability, and to

receive damages if the trial court did not accept that theory, but accepted any other one.

Although this election did not occur until after Rack Co.’s case-in-chief, we hold that

any error was harmless. Moreover, the Kreimers were unsuccessful in their HSSA-

based claim and received only damages. Accordingly, we overrule Rack Co.’s third

assignment of error.

           {¶23}     In its fourth and final assignment of error, Rack Co. argues that the trial

court erred by not finding that material deviations from the agreement increased the

cost of the lake project. But because the trial court was in the best position to resolve

questions of fact and evaluate witness credibility, we must accept its findings of fact so




16   T.p. 164-165.
17   Cas. Restoration Servs., 2007-Ohio-5131, at ¶ 8.



                                                   7
                          OHIO FIRST DISTRICT COURT OF APPEALS



long as they were supported by competent, credible evidence.18 Because they were, we

overrule this assignment of error.

                                       Appeal No. C-100496

           {¶24}    In their sole assignment of error, the Kreimers argue that the trial court

erred by not including their paralegal expenses as part of their attorney fees. As with

any other challenge to an attorney-fee award, we will not reverse unless the amount

awarded was “so high or so low as to shock the conscience.”19

           {¶25}    The trial court awarded the Kreimers $26,675 in attorney fees. This

represented 54.25 hours of partner time at $300 per hour, 12 hours of partner travel

time at $150 per hour, 41 hours of associate time at $200 per hour, and four hours of

associate travel time at $100 per hour. The court, however, declined to award the

$4,250 of paralegal expenses, which represented 34 hours at $125 per hour.

           {¶26}    Under R.C. 1345.09(F)(2), a “court may award to the prevailing party a

reasonable attorney’s fee limited to the work reasonably performed if * * * [t]he

supplier has knowingly committed an act or practice that violates this chapter.”

Although we have previously acknowledged a lack of authority regarding paralegal

expenses under this statute,20 the Sixth Appellate District has since awarded such

expenses.21

           {¶27}    Nevertheless, we cannot say that the actual award of $26,675 was so low

in relation to $30,925 that it shocks the conscience. Moreover, the trial court

specifically found that the paralegal expenses incurred by the Kreimers were unrelated


18   State v. Gunn, 1st Dist. No. C-070016, 2007-Ohio-6874, at ¶ 6.
19 Bryant v. Walt Sweeney Auto., Inc., 1st Dist. Nos. C-010395 and C-010404, 2002-Ohio-2577,
at ¶ 37, quoting Bittner v. Tri-County Toyota (1991), 58 Ohio St.3d 143, 146, 569 N.E.2d 464.
20   Id. at ¶ 33.
21   Borror v. MarineMax of Ohio, Inc., 6th Dist. No. OT-06-010, 2007-Ohio-562.


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                     OHIO FIRST DISTRICT COURT OF APPEALS



to their CSPA claims. Accordingly, we overrule the Kreimers’ sole assignment of error

and affirm the trial court’s judgment.

                                                                    Judgment affirmed.


D INKELACKER , P.J., and H ILDEBRANDT and F ISCHER , JJ., concur.




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