Ammerman v. Avis Rent A Car System, Inc.

• Decision Date: 23 September 1982
• Citation: 455 N.E.2d 1041,7 OBR 436,7 Ohio App.3d 338
• Parties: , 7 O.B.R. 436 AMMERMAN, Appellant, v. AVIS RENT A CAR SYSTEM, INC., Appellee. *
• Court: Ohio Court of Appeals

Page 338

7 Ohio App.3d 338

455 N.E.2d 1041, 7 O.B.R. 436

AMMERMAN, Appellant, v. AVIS RENT A CAR SYSTEM, INC., Appellee. ^*

Court of Appeals of Ohio, Tenth District, Franklin County.

Sept. 23, 1982.

Syllabus by the Court

1. The signature of a lessee to a lease will not be required where the lessor has signed, executed and delivered the lease instrument and the lessee has already entered into possession of the leased premises.

2. The authority to act as agent may be conferred if the principal affirmatively or intentionally, or by lack of ordinary care, causes or allows third persons to act on an apparent agency. It is essential that two important facts be clearly established: (1) that the principal held the agent out to the public as possessing sufficient authority to embrace the particular act in question, or knowingly permitted him to act as having such authority, and (2) that the person dealing with the agent knew of the facts and acting in good faith had reason to believe and did believe that the agent possessed the necessary authority.

C. William Malone, Columbus, for appellant.

Guren, Merritt, Feibel, Sogg & Cohen, Nathan Gordon and Kenneth R. Cookson, Columbus, for appellee.

McCORMAC, Judge.

Plaintiff-appellant, Mary K. Ammerman, has appealed the judgment entered by the court dismissing her claims for ejectment, rent and damages for breach of a lease agreement, as filed against defendant-appellee, Avis Rent A Car System, Inc. The entry followed a nonjury trial. Plaintiff's appeal focuses on the following assignments of error:

"The Trial Court, contrary to the uncontroverted evidence and the law, erred:

"I. In finding that there was no valid enforceable lease of the 3022-3026 Fourteenth Avenue, Columbus, Ohio, premises.

"II. In finding that there was no valid enforceable agreement between the parties to lease the 3022-3026 Fourteenth Avenue, Columbus, Ohio, premises.

"III. In finding that there was no termination of the lease of the 3021 Switzer Road, Columbus, Ohio, premises.

"IV. In dismissing the Complaint of Plaintiff."

The dispute arose from a series of agreements between the parties for the lease of certain commercial buildings owned by plaintiff and located on Switzer Road and on Fourteenth Avenue in Columbus. Throughout the negotiations, plaintiff's husband was authorized to represent her and to manage the properties. According to the testimony at trial, he dealt exclusively with Richard Gonzales, the Ohio Zone Manager for the defendant. Further testimony indicated that Gonzales forwarded all documents arising from the negotiations to his superiors in defendant's Chicago office. However, Mr. Ammerman never received any approval, objection, or other acknowledgment from any Avis personnel other than Gonzales.

The first lease executed between the parties involved a building located on Switzer Road, to be leased for a five-year period beginning April 1, 1978. Ammerman and Gonzales negotiated another lease for a second building on Switzer Road, this one for a three-year term beginning May 1, 1979. As with the previous transaction, Ammerman had the lease prepared and sent to Gonzales. When the executed lease was not returned, Ammerman inquired and Gonzales sent a written response indicating that his prior conversations with Ammerman as well as the letter itself would serve as confirmation of Avis' intention to lease.

Ammerman and Gonzales discussed a third lease during the summer of 1979, involving property located on Fourteenth Avenue. A proposed agreement was drawn up to cover the lease of this building in keeping with the parties' negotiations. This agreement was sent to Avis' Chicago office by Gonzales. The lease was to commence January 1, 1980, however, defendant obtained plaintiff's permission to begin occupancy on November 19, 1979. Having already occupied the premises, Gonzales informed Ammerman by letter of Avis' intention to go through with the lease according to the agreement, although he stated that the written document might not be returned until sometime later. Ammerman incorporated the agreed terms into a five-year lease, which he executed and sent to Gonzales, who in turn forwarded it to his superiors along with copies of all correspondence relating to the transaction sent between himself and Ammerman. No objection, approval, or response of any kind was ever received from Avis.

After moving into the Fourteenth Avenue premises, Gonzales also informed Ammerman that the defendant desired to terminate its lease of the Switzer Road property. Plaintiff agreed and prepared the necessary documents which were sent to Chicago, along with the lease papers for the Fourteenth Avenue property. Soon thereafter Gonzales informed Ammerman that defendant would need more time to vacate Switzer and requested a delay of the lease cancellation for one month, until January 31, 1980. Ammerman agreed to the extention, but stated that a new lease would need to be drawn up at a higher rental rate for any occupancy past January 31, 1980, in light of negotiations with other clients interested in renting the property at the higher rate. Again, no response was received to this proposal from Gonzales or any other Avis personnel.

Nothing further transpired between the parties until December 21, 1979, at which time Gonzales informed Ammerman that defendant's Chicago office was cancelling the new lease and the move to Fourteenth Avenue because of the expected economic recession. However, defendant did wish to continue occupying the Switzer Road building. Ammerman responded that the Fourteenth Avenue lease was binding upon the defendant, as was the cancellation of Switzer, and that defendant could not remain in the Switzer premises past January 31, 1980, unless it entered into a new lease. Nevertheless, defendant vacated Fourteenth Avenue without paying any rent and has continued to occupy Switzer at the original rental rate, which Ammerman has accepted with the reservation that it represents only partial payment of the actual rent owed. Since defendant vacated Fourteenth Avenue, Ammerman has successfully leased one-half of the building for a term of three years.

Plaintiff's first two assignments of error will be combined for discussion as they are interrelated. Plaintiff maintains the court's finding that no valid lease or binding agreement existed between the parties, with respect to the property on Fourteenth Avenue, is contrary to law. In support of this argument, plaintiff cites R.C. 5301.01, which makes clear that only the lessor need sign and acknowledge a lease in the presence of witnesses to make it effective. In this case, plaintiff had prepared and executed a lease after defendant had already occupied the premises. The written lease followed approval by Gonzales of a proposed agreement setting forth all the specific terms which would bind the parties. Gonzales specifically stated to Ammerman, in a letter written December 3, 1979, that all terms were in keeping with their discussions, and that the purpose of his letter was to confirm Avis' intention to go through with the lease, commencing officially on January 1, 1980, with their payment of rent, even though the paperwork might not yet have been returned from their Chicago office. No objection to the lease was ever raised by any Avis personnel, but, rather, the lease was said to be cancelled in anticipation of the oncoming economic recession. Ammerman received this information on December 21, 1979, and defendant vacated the premises early in January 1980.

Plaintiff's argument is supported by R.C. 5301.01. Having already occupied the premises, defendant made clear its intention to lease the premises. Absence of its signature as a lessee on the actual document does not invalidate the conveyance in light of the surrounding circumstances. As noted in Zakrajsek v. Vesel (A...