Drumm v. Lewis

[Cite as Drumm v. Lewis, 2026-Ohio-4258.] IN THE OHIO COURT OF APPEALS FIFTH APPELLATE DISTRICT LICKING COUNTY, OHIO WILLIAM DRUMM, et al., Case No. 2025 CA 00095 Plaintiffs-Appellees/ Opinion & Judgment Entry Cross-Appellants Appeal from the Court of Common Pleas -vs- of Licking County, Case No. 23CV1205 MICHAEL LEWIS, et al., Judgment: Affirmed Defendants-Appellants/ Cross-Appellees Date of Judgment: October 27, 2026 BEFORE: Craig R. Baldwin, Kevin W. Popham, and David M. Gormley, Judges APPEARANCES: Sarah N. Marshall and Kristin E. Rosan (Madison & Rosan, LLP), Columbus, Ohio, for Plaintiffs-Appellees/Cross-Appellants; David G. Bale, Westerville, Ohio, for Defendants-Appellants/Cross-Appellees. Gormley, J. {¶1} Defendants Michael and Venda Lewis challenge a trial-court decision granting summary judgment in favor of plaintiffs William and Anita Drumm on the Drumms’ claims for breach of contract and fraud. The Lewises argue here that they had no duty to disclose to potential buyers, when selling their home “as is,” that their backyard was prone to flooding after rainstorms. A drainage easement running across their backyard was evident from publicly available real-property records, the Lewises say, and the occasional flooding of their yard was not, in their view, the kind of “defect” that they as the sellers of a residence were required to reveal to would-be buyers. {¶2} The Drumms, in turn, agree with the trial court’s view that the flooding issue should have been disclosed to them before they bought the Lewises’ home, but they argue in a cross-appeal here that they are entitled to more damages than the amount awarded to them by the trial court. {¶3} After reviewing the record, we agree with the trial court that the Drumms — the buyers of the home — are entitled to summary judgment on their breach-of-contract and fraud claims, but we also conclude that the Lewises — the sellers of the home — ought not be required to pay any additional damages on those claims beyond the amount set by the trial court. In short, we affirm the trial court’s judgment. The Key Facts {¶4} In August 2021, the buyers signed a contract for the purchase of the home in question, which is in Licking County’s Harrison Township. That contract called for the buyers to purchase the home in its “as is” condition. As required by R.C. 5302.30 and Ohio Administrative Code 1301:5-6-10, the sellers had filled out a standard residential-property disclosure form and had provided it to the buyers. No information about flooding concerns was listed by the sellers on that form, and a home inspection conducted at the behest of the buyers before the closing of the sale revealed no flooding or drainage-related issues on the property. {¶5} Soon after the sale of the property, the buyers first experienced an episode of extensive flooding in the backyard after a rainstorm. That episode — the buyers later alleged in their lawsuit — affected their ability to use that backyard as well as a shed located there. After the buyers expressed to the sellers’ real-estate agent their displeasure with the condition of the drainage situation in their new backyard, one of the sellers sent an email to that realtor acknowledging that the sellers had made a “mistake” by not disclosing the condition to the buyers. The seller who sent that email acknowledged in it that the drainage issue had become a “nuisance” while the sellers still owned the home, and he mentioned to the realtor, too, that — a few months before selling the home — he had contacted a county agency that focuses on water and soil issues to inquire how he could make “the necessary repairs to bring the drainage back to the original design.” {¶6} Meanwhile, the buyers, in the months after they moved into the home, installed two French drains, along with a perforated outlet drain and some water-absorbing landscaping, in an effort to alleviate future backyard floods. Then roughly two years after acquiring the property, the buyers filed suit against the sellers for breach of the purchase contract and for fraud (fraudulent nondisclosure, fraudulent misrepresentation, and fraudulent concealment). {¶7} Both sides of the dispute sought summary judgment on the buyers’ claims, and the trial court sided with the buyers. After a hearing on the issue of damages, the trial court awarded $7,605 in compensatory damages to the buyers as well as punitive damages in that same amount. The trial court declined to order the sellers to pay the buyers’ attorney fees. {¶8} The sellers now appeal the trial court’s summary-judgment ruling on the liability question, and they argue, too, that the damage award is too high. The buyers, in turn, challenge the outcome also, though they argue that the damage award is too low, and they ask for an award of attorney fees too. The Trial Court Properly Granted Summary Judgment in Favor of the Buyers {¶9} The trial court resolved the parties’ competing motions for summary judgment in favor of the buyers, concluding that the sellers’ failure to disclose the periodic flooding issue in their backyard had defrauded the buyers and was a breach of the parties’ sales contract.  {¶10} We review with fresh eyes a trial court’s decision to grant summary judgment. McCord v. Ron Laymon Trucking Co., 2005-Ohio-4399, ¶ 19 (5th Dist.). Summary judgment is proper only where no material facts are genuinely in dispute, where the moving party is entitled to judgment as a matter of law, and where reasonable minds, viewing the evidence most strongly against the movant, can reach but one conclusion, with that conclusion being adverse to the non-moving party. Id. at ¶ 22; Civ.R. 56(C). The Sellers Had a Duty to Disclose the Backyard-Flooding Issue {¶11} All parties agree that they signed a valid purchase agreement for the property and that the sellers never disclosed to the buyers anything about the flooding that sometimes occurs in the backyard after a heavy rain. What the parties dispute is whether the sellers, on the property-disclosure form, had a duty to disclose information about possible backyard floods. {¶12} The purchase contract called for the sellers to provide the buyers with a completed property-disclosure form that complied with Ohio law. The relevant law — R.C. 5302.30(C) — requires any seller of residential real property to fill out that kind of form and to deliver a signed and dated copy of it to each prospective buyer. {¶13} The disclosure form in Ohio requires that any seller disclose “material matters relating to the physical condition of the property . . . and any material defects in the property that are within the actual knowledge of the [seller].” Adm.Code 1301:5-6-10. Each required disclosure must be made in good faith. R.C. 5302.30(E)(1). “Good faith” is defined as “honesty in fact.” R.C. 5302.30(A)(1). {¶14} Section K of the disclosure form addresses drainage and erosion and asks the seller if he or she “know[s] of any previous or current flooding, drainage, settling or grading or erosion problems affecting the property.” The sellers in this case checked the “no” box in response to that question. In addition, section N of the disclosure form directs the seller to list any other “known material defects in or on the property,” and it includes within the meaning of “material defects” any “non-observable physical condition” that could “inhibit a person’s use of the property.” The sellers in this case listed nothing in section N. {¶15} In his deposition testimony, seller Michael Lewis testified that he had observed flooding in the backyard on four occasions during the eight years when he resided in the home. When a large volume of rain fell in a short time period, Lewis testified, the backyard’s shallow channels and depressions, which could ordinarily collect, slow, and convey stormwater runoff, reached their capacity and caused his and neighboring yards to flood. {¶16} He also testified that he checked “no” on the property-disclosure form in response to the question about previous or current flooding because he did not believe that the flooding affected the property or was a problem. Water accumulation was a naturally occurring condition during heavy downpours, he added, and the swales and ditches on the property worked as designed (albeit sometimes over the course of several days while excess water slowly infiltrated into the soil), so any short-term accumulation of water was not a defect. Lewis did acknowledge at his deposition, though, that he had, before selling the property, asked local government officials about his possible need for a permit that would allow him to make improvements to the existing drainage easement — the configuration of swales and ditches — on the property. {¶17} As they did during the case’s discovery phase, the sellers say here on appeal that the backyard-flooding issue was not a “defect.” In Ohio, a defect is “some sort of inadequacy or flaw.” Ashmus v. Coughlin, 2025-Ohio-2412, ¶ 25. According to the Supreme Court of Ohio, dictionary definitions offer additional guidance on the term’s meaning: “(1) ‘an irregularity in a surface or a structure that spoils the appearance or causes weakness or failure,’ and (2) the ‘want or absence of something necessary for completeness, perfection, or adequacy in form or function.’” Id., quoting Webster’s Third New International Dictionary (2002). {¶18} In our view, the flooding issue was a defect or problem that should have been disclosed by the sellers on the property-disclosure form. That form directs a seller to disclose “any previous or current flooding, drainage, settling or grading or erosion problems affecting the property.” Given that the sellers’ backyard sometimes flooded after heavy rains — leaving standing water on the property for several days while the water slowly soaked into the ground or drained onto adjacent properties — “no” was not a truthful response to the disclosure form’s question about flooding and drainage. The issue was one that adversely affected the backyard’s appearance for sometimes days at a time, and it could reasonably be expected to limit the use and enjoyment of that space by any owner of the property. Neither the As-Is Nature of the Sale nor the Buyer-Beware Doctrine Excused the Sellers from Disclosing the Flooding Issue {¶19} Even so, the sellers note that the sales contract in this case characterized the transaction as an “as is” sale, and they point, too, to the buyer-beware doctrine and to the fact that public records about a drainage easement across the property could have been examined by the buyers before the sale. {¶20} The inclusion of an “as is” clause in a purchase contract generally bars claims against a seller for nondisclosure. Jacob v. Racevskis, 105 Ohio App.3d 1, 6 (2d Dist. 1995). That kind of clause does not, however, protect a seller from liability for fraudulent misrepresentations made on a residential-property disclosure form. Nieberding v. Barrante, 2021-Ohio-2593, ¶ 33 (8th Dist.). See also Hubbard Family Trust v. TNT Land Holdings, LLC, 2014-Ohio-772, ¶ 26 (4th Dist.) (an “’as is’ clause is inapplicable if the property disclosure form contains misrepresentations”). {¶21} The caveat-emptor or buyer-beware doctrine, which applies to real-estate transactions in Ohio, has been held to apply to an “as is” residential sale. AE Property Servs., L.L.C. v. Sotonji, 2019-Ohio-786, ¶ 17 (8th Dist.). “[T]he doctrine governs the obligation of sellers to disclose information in real estate transactions and precludes any reliance on certain misrepresentations made by a seller or seller’s agent concerning the condition of that property.” Schmiedebusch v. Rako Realty, Inc., 2005-Ohio-4884, ¶ 19 (5th Dist.). When the information is equally open to both parties, a buyer has no right to rely on representations made about the property. Id., citing Traverse v. Long, 165 Ohio St. 249, 252 (1956). {¶22} The buyer-beware doctrine precludes a disappointed purchaser’s effort to recover damages from a seller when: “(1) the defect or condition is open to observation or discoverable on reasonable inspection; (2) the purchaser had unimpeded opportunity to examine the property; and (3) the seller did not engage in affirmative misrepresentation or concealment so reprehensible in nature as to constitute fraud.” Schmiedebusch at ¶ 19, citing Traverse at 252. {¶23} Although the buyer-beware doctrine still applies in Ohio, the property- disclosure form mandated by R.C. 5302.30 imposes a duty on a seller to disclose both obvious and hidden defects that are within that seller’s actual knowledge. If a seller, acting with an intent to mislead, fails to disclose a material fact on the disclosure form, and if the buyer in turn relies on that form, the seller may be liable for any resulting injury. Pedone v. Demarchi, 2007-Ohio-6809, ¶ 31 (8th Dist.).  {¶24} But where the buyer “has had the opportunity to inspect the property, he is charged with knowledge of the conditions that a reasonable inspection would have disclosed.” Nunez v. J.L. Sims Co., Inc., 2003-Ohio-3386, ¶ 17 (1st Dist.). A seller’s failure to disclose will not rise to the level of fraud “unless the defect was latent, i.e., it could not have been detected by inspection.” Id., citing Layman v. Binns, 35 Ohio St.3d 176, 178 (1988). {¶25} In this case, the buyers had an unimpeded opportunity to inspect the property before the sale. They themselves walked the property, and they also hired a home inspector who prepared a report noting some minor concerns about the residence. Yet neither the home inspector nor the buyers themselves observed any backyard-drainage issues before the sale. According to the buyers, they could not have discovered the backyard-flooding issue during their site visits or during any inspections because they and their inspector never saw the property during or shortly after any heavy rainstorms. What they now describe as a significant drainage problem was, they allege, a hidden defect. {¶26} We agree with the trial court that the extent of the drainage issues and the pooling of water in the backyard could not have been discovered by the buyers from a reasonable inspection of the property or from the recorded documents on which the drainage easement is shown. Even under the buyer-beware doctrine, the sellers could be expected to acquire no more knowledge than what they could discover through a reasonable inspection. See Nunez, 2003-Ohio-3386, at ¶ 17 (1st Dist.). Having never inspected the property during or soon after any heavy rainstorms, the buyers had no knowledge about the flooding problem, and nothing on the property-disclosure form or on any publicly available real-property records suggested to the sellers that they needed to either inquire about drainage issues or inspect the property during or in the days after a downpour.  {¶27} The issue was, in the end, a hidden one that a reasonable buyer would expect would be disclosed by a seller who was aware of it. Given that the sellers had experienced the backyard-flooding issue on multiple occasions and yet downplayed it by saying nothing about it on the disclosure form, we cannot say that information about the problem was equally available to the buyers and sellers, and we see no support for the view that a reasonable buyer would have discovered the problem during an inspection. {¶28} A recent Supreme Court decision does not change our thinking. At issue in Ashmus v. Coughlin, 2025-Ohio-2412, was a sewer line running through a property that the buyers of the property did not discover until after their purchase. Explaining that “a working sewer line and a recorded easement do not constitute a defect,” the court found that the seller had no obligation to mention the sewer line on the kind of property-disclosure form that is at issue in our case. Id. at ¶ 24. {¶29} Our case is different. The buyers here are not claiming that the drainage easement across the property should have been listed on the property-disclosure form. Rather, their lawsuit rests on the view that the easement — essentially a system of swales and ditches designed to manage excess water in the backyard — was not working as intended, and therefore, they say, that defect should have been disclosed to them because it was not a problem that they could or should have discovered on their own. See id. at ¶ 27 (under a reasonable-person standard, a sewer line is defective if a pipe is cracked and the sewer backs up, but it is not defective if it works perfectly but is inconveniently located). {¶30} In sum, we conclude that the sellers had a duty under Ohio law to disclose the backyard-flooding issue on the property-disclosure form. The sellers were aware of that issue and its impact on the appearance and functionality of the backyard, and the buyers — who appropriately undertook a careful and professional inspection before the sale — should not have been expected to discover the problem, given that neither the disclosure form nor any publicly available documents suggested that anything was amiss in the backyard. The Failure to Disclose Was a Breach of the Purchase Agreement {¶31} The buyers’ first claim alleged a breach of contract. The elements of such a claim are that a contract existed, the plaintiff fulfilled his obligations under the contract, the defendant failed to fulfill his obligations, and damages resulted from that failure. Hudson v. Jones, 2023-Ohio-1447, ¶ 28 (5th Dist.). {¶32} The existence of a valid purchase agreement is not disputed. The agreement required the sellers to provide a property-disclosure form to the buyers, and the completed form in this case made no mention of any drainage or flooding issues in the backyard. {¶33} As we discussed above, the sellers’ duty to disclose the backyard flooding was not excused by the “as is” clause in the purchase agreement or by the buyer-beware doctrine. Rather, the purchase agreement required the sellers to provide a property-disclosure form that complied with R.C. 5302.30, and the sellers failed to meet that obligation when they stayed silent about the drainage defect. And undeniably, the buyers incurred some expenses when they tried to solve the drainage problem. {¶34} We find that no genuine issues of material fact are in dispute and that reasonable minds could reach but one conclusion: the buyers are entitled to summary judgment on their breach-of-contract claim. The Failure to Disclose Constituted Fraud {¶35} The buyers sued for fraud as well. To succeed on that kind of claim, a party must establish: (1) a representation or, where there is a duty to disclose, concealment of a fact, (2) which is material to the transaction at hand, (3) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (4) with the intent of misleading another into relying upon it, (5) followed by justifiable reliance upon the representation or concealment by the other party, and (6) resulting injury proximately caused by the reliance. Russ v. TRW, Inc., 59 Ohio St.3d 42, 49 (1991). A fraud claim may be based on an omission if the party who omitted the fact had a duty to disclose it. Walker v. Firelands Community Hosp., 2007-Ohio-871, ¶ 55 (6th Dist.). {¶36} R.C. 5302.30 “merely codifies a party's duty to disclose certain facts for the purposes of residential real estate transactions.” Montgomery v. Vargo, 2016-Ohio-809, ¶ 9 (8th Dist.). A party is still required to present evidence on the elements of a fraud claim. Id. Being aware of a defect and fraudulently concealing that defect by not listing it on a property- disclosure form can constitute fraud. McClintock v. Fluellen, 2004-Ohio-58, ¶ 22-23 (8th Dist.). {¶37} The record establishes that the sellers knew that their backyard was prone to flooding after heavy rainfalls. Even though those sellers chose to live with the flooding issue rather than trying to fix it themselves, they had a duty under Ohio law to disclose the condition to prospective buyers. After all, the disclosure form called for them to reveal information about any “flooding [or] drainage . . . problems affecting the property” as well as any “non-observable physical condition existing on the property” that could “inhibit a person’s use” of it. {¶38} The sellers’ concealment of what they knew to be a flooding problem was material to the sale of the property, and their silence was inconsistent with their obligation to provide answers — as the disclosure form itself indicated — in “good faith” and based on their “actual knowledge.” And the sellers surely expected that any would-be buyers would rely on what they wrote or failed to write on that disclosure form. Indeed, the buyers testified at depositions that they did in fact rely on the property-disclosure form when purchasing the property. That reliance was, in our view, reasonable and justifiable. The sellers’ concealment of the flooding issue was, in short, fraudulent. {¶39} When “no genuine issue of material fact exists as to whether a party justifiably relied on a misrepresentation, ‘summary judgment on that issue is appropriate.’” Morgan v. Cohen, 2019-Ohio-3662, ¶ 47 (8th Dist.), quoting March v. Statman, 2016-Ohio-2846, ¶ 22 (1st Dist.). The buyers established, too, that they experienced an injury proximately resulting from the nondisclosure: the incurring of expenses stemming from their efforts to improve the drainage on the property. {¶40} We find in the end that no genuine issues of material fact are disputed and that reasonable minds could reach but one conclusion on the fraud claim. The buyers are therefore entitled to summary judgment on that claim. The Trial Court Properly Awarded Damages {¶41} Both sides of the dispute are unhappy with the trial court’s judgment awarding damages. The sellers argue that the damage award was too high because the trial court awarded damages for repairs undertaken by the buyers that were, in the sellers’ view, not reasonable or necessary. And the trial court erred — the buyers say — by awarding too little in damages and by failing to award attorney fees. {¶42} Although we review the trial court’s grant of summary judgment with fresh eyes, we review solely for an abuse of discretion a trial court’s damage award. Continuum Transp. Servs., Ltd. v. Elite Internatl. Corp, L.L.C., 2022-Ohio-3738, ¶ 21 (8th Dist.). An abuse of discretion is more than a mere error of law; “it implies that the court’s attitude is unreasonable, arbitrary[,] or unconscionable.” Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). {¶43} At the damages hearing held in the trial court, the buyers themselves testified about the repairs that they — or professionals whom they hired — made to the drainage system in the home’s backyard, and they offered up invoices, receipts, and some handwritten notes about their expenses. They also provided the trial court with some photographs of the backyard after heavy rainfalls, including photos taken both before and after repairs had been made. In addition, a certified real-estate appraiser testified for them about the property’s value. {¶44} A party who is injured by the other party’s fraudulent actions is entitled to recover damages proximately resulting from the fraud. Brewer v. Brothers, 82 Ohio App.3d 148, 154 (8th Dist. 1992). Where fraud induces the purchase of real estate, “Ohio courts have held that the proper measure of damages is the difference between the value of the property as it was represented to be and its actual value at the time of purchase or exchange,” which is known as the “benefit of the bargain” rule. Id., citing Molnar v. Beriswell, 122 Ohio St. 348 (1930), paragraph one of the syllabus. {¶45} The cost of repair or replacement has also been held to be a proper method for measuring damages. Brewer at 154. If practical difficulties exist with establishing the value of a property with and without the defects, a trial court may determine the adequate amount of damages from the repair or replacement cost. Helfrich v. Strickland, 2009-Ohio-4828, ¶ 33 (5th Dist.). In the end, the goal of any damage award is “to compensate the owner for the loss sustained.” Id. The evidence of damages “need only tend to show the basis for the computation of damages to a fair degree of probability.” Brewer at 154.  {¶46} The trial court considered the testimony of the buyers as well as the documents that they submitted to substantiate their expenditures for the repairs they undertook. According to that testimony, the repairs have improved the drainage problem on the property, and some photographs from the buyers appear to support the effectiveness of the repairs. The buyers told the trial court that, after they acquired the property, rainwater sometimes remained in the backyard for three or four weeks after heavy downpours. Now that repairs have been made to the drainage system, though, that time has been reduced to no more than four days, the sellers testified. {¶47} The trial court received, too, a written appraisal and some testimony about it from the real-estate appraiser hired by the buyers. That person testified that the value of the property when the buyers acquired it was $299,450, but the purchase price they paid was $331,000. The appraiser opined that the as-acquired true value of the property had been pushed down by what he called an “entrepreneurial incentive,” which he described as an amount “that a buyer would require in order to take on the project.” {¶48} After considering the evidence presented at the damages hearing, the trial judge determined that $7,605 was the cost for reasonable repairs aimed at making floods “less likely and briefer in duration.” This amount included the actual costs that the buyers had incurred to excavate and install drains in the backyard, to plant trees and grass, and to acquire a small cultivation device. {¶49} The trial judge did not view as reasonable the buyers’ request to be reimbursed for the money that they expected to spend to replace an old shed on the property. And the trial judge also did not embrace the buyers’ request for damages for future repairs they might undertake. The repairs already completed had largely addressed the flooding problem, the judge concluded, so he declined to award damages for additional repairs that the buyers hoped to take on. {¶50} By setting the amount of damages at the actual costs of the repairs made, the trial judge necessarily found that the appraiser’s alternative method — which focused on the difference between the sale price of the property and the appraiser’s estimate of the true as- acquired value of it — was not the proper amount of damages. We cannot say that the trial judge abused his discretion by selecting that former approach over the latter. {¶51} We also see no unreasonableness or arbitrariness in the trial judge’s calculation of the damage amount itself. Evidence in the record from the damages hearing allows us to see how the judge came up with an actual repair cost of $7,605, and we see no abuse of discretion in the trial judge’s award of that amount as compensatory damages. {¶52} In light of the sellers’ fraudulent non-disclosure of the flooding issue, the trial judge awarded an additional $7,605 in punitive damages to the buyers. Because we agree that the buyers proved their fraud claim, we see no abuse of discretion in the trial court’s punitive- damages award. {¶53} The sellers should have been ordered to pay the buyers’ attorney fees, too, according to the buyers. In rejecting that view, the trial judge noted that Ohio courts generally follow the “American rule” under which a prevailing party in a civil suit “may not recover attorney fees as a part of the costs of litigation.” Wilborn v. Bank One Corp., 2009-Ohio-306, ¶ 7. A trial court may award attorney fees, however, if any of several recognized exceptions applies. In the end, though, any award of attorney fees is a matter of discretion for the trial court. Clark v. Clark, 2025-Ohio-159, ¶ 117 (5th Dist.).  {¶54} The trial judge acknowledged that he had the authority to award attorney fees in a case like this, but he explained his view that doing so would not be appropriate. Where the buyers claimed to have spent tens of thousands of dollars more on legal fees than they had spent to remedy the drainage issue itself, the trial judge concluded that an attorney-fee award was not warranted in the case. {¶55} Again, we see no abuse of discretion in that outcome. When weighing whether to award attorney fees, a trial court may consider whether any punitive damages awarded in the case are “adequate both to compensate the plaintiff for his attorney fees and to fulfill the punitive and deterrent purpose of the exemplary damages awarded.” Digital & Analog Design Corp. v. N. Supply Co., 63 Ohio St.3d 657, 664 (1992). In this case, the trial judge found that the sum of the compensatory and punitive damages was sufficient to fully compensate the buyers and that no additional compensation for attorney fees was justified. That view was both permissible and not unreasonable and was certainly consistent with Ohio law. See id. at 664–665 (if the trial court concludes that the damages awarded are sufficient to fulfill the punitive and deterrent purposes, the court may decline to award attorney fees). {¶56} For these reasons, the judgment of the Court of Common Pleas of Licking County is affirmed. Costs are to be split equally between the Appellants/Cross-Appellees (Michael and Venda Lewis) and the Appellees/Cross-Appellants (William and Anita Drumm). By: Gormley, J.; Popham, P.J. and Baldwin, J. concur.