G.A.I. Capital Grp. v. Lisowski
| Docket Number | 23 MA 0052 |
| Decision Date | 28 December 2023 |
| Parties | G.A.I. CAPITAL GROUP LLC, Plaintiff-Appellee, v. EDWARD LISOWSKI et al., Defendants-Appellants. |
| Court | Ohio Court of Appeals |
1
2023-Ohio-4802
G.A.I. CAPITAL GROUP LLC, Plaintiff-Appellee,
v.
EDWARD LISOWSKI et al., Defendants-Appellants.
No. 23 MA 0052
Court of Appeals of Ohio, Seventh District, Mahoning
December 28, 2023
Civil Appeal from the Mahoning County Court No. 5 of Mahoning County, Ohio Case No. 2022 CV F 00010
Atty. Brian A. Coulter, Brouse McDowell LPA, for Plaintiff-Appellee and
Atty. Jeffrey A. Kurz, for Defendants-Appellants.
BEFORE: Carol Ann Robb, Cheryl L. Waite, Mark A. Hanni, Judges.
OPINION AND JUDGMENT ENTRY
Robb, J.
{¶1} Appellants, Edward Lisowski, and Kimberly Lisowski and Concepts & Creativity, LLC, appeal the judgment granting Appellee, G.A.I. Capital Group, LLC, judgment and damages in the amount of $7,253.50 plus interest following a bench trial. Appellants raise nine assignments of error.
{¶2} For the following reasons, we affirm in part, reverse in part, and remand for further proceedings.
Statement of the Facts and Case
{¶3} Appellee filed suit in January of 2022 against Appellants Edward and Kimberly Lisowski individually and their limited liability company, Concepts & Creativity, LLC (hereafter C&C). Appellee purchased the building and acquired two leases listing Appellants as lessors. Appellants owned and operated a dance studio from the building until sometime in 2020.
{¶4} Appellee listed three causes of action: breach of contract, breach of guaranty, and unjust enrichment. Appellee claimed that after it purchased the building, Appellants failed to pay their monthly lease total of $2,100 for July through October of 2020. And after Appellants vacated the building, Appellee claims to have incurred damages to repair the interior and for trash removal. Attached to the complaint are Appellants' leases, marked as exhibits A and B.
{¶5} Appellants Edward Lisowski and Kimberly Lisowski filed separate answers, and Edward filed a cross-claim against Kimberly, his ex-wife. Appellants also filed separate summary judgment motions, which the trial court summarily overruled.
{¶6} The case was heard at a bench trial in February of 2023. Three witnesses testified at trial.
{¶7} Appellee's first witness was Attorney John McNally, counsel for Canfield Properties, LLC, the company that leased the premises to Appellants and sold the real property to Appellee. McNally did not draft the lease agreements, but authenticated the two leases at trial. The 2009 lease required a monthly payment of $607 and the 2008 lease required a monthly payment of $862.50.
{¶8} McNally likewise authenticated a ledger of amounts Appellants paid to Canfield Properties in 2020. The ledger reflects payments in the amount of $2,100 for January, February, March, April, and May. For the month of June 2020, the ledger indicates "free rent." And for July, the ledger reflects payments in the amount of $1,050. (Trial Tr. 14-19; Exhibit C.)
{¶9} The president of G.A.I. Capital Group, Terrill Vidale, also testified. He explained how his company, G.A.I., acquired the building and Appellants' leases from Canfield Properties. It consisted of nine rental units. He testified twice that Appellants occupied five units, units B,C, D, I, and O, with a collective total monthly rent of $2,100.
{¶10} G.A.I. was to first collect lease payments from Appellants beginning in July of 2020. Vidale dealt with both Edward and Kimberly regarding the property. Vidale said he never agreed to give Appellants free rent.
{¶11} Vidale testified that when he encountered Appellants, they kept promising to pay him but never did. Finally, he gave them a three-day notice to vacate, and they moved out. (Trial Tr. 79-80, 96.)
{¶12} He said Appellants were not prevented from cleaning out their rented units when they left. Vidale said he changed the locks at the end of October of 2020, but did not deny Appellants access to clean out their spaces. Vidale took photographs of the condition of the property when Appellants left. Appellee introduced his photographs of the damaged floor, walls, and discarded items left in the spaces. Because he is a commercial landlord, he usually takes photographs when a tenant leaves a property. Vidale paid $1,800 to have the units cleaned and repaired. (Trial Tr. 63-67.) On cross-examination, he said he did not remember whether the mirrors were still on the walls when Appellants vacated the units. He did not remove the mirrors, but he paid another individual to do it. The walls were damaged from where the mirrors were hung requiring resurfacing of drywall. (85-87.)
{¶13} Janice Semple was the sole defense witness to testify. She was C&C's office manager and is Kimberly's mother. Semple was not present when any of the leases were agreed upon or executed. She described Edward as not being active in the day-today business operations. She explained how he mostly helped Kimberly when something needed repaired or for maintenance. (Trial Tr. 103-105; 119.)
{¶14} Semple was present during an August 2020 meeting between Kimberly, Edward, and Vidale. During this meeting, Vidale expressed concerns that Appellants had not yet re-signed their lease. She recalls he was also asking for rent payments at this meeting.
{¶15} According to Semple, Kimberly refused to sign a new lease because her number of students had significantly reduced due to Covid-19. Semple stated Kimberly volunteered to leave the space, but Vidale indicated he did not want an empty building. Semple stated: "[Vidale] did not want the building empty. He was afraid the banks were going to come back on him because he - - he said he had a million dollar loan with the bank * * *." When Semple was asked about whether he told Appellants not to pay rent, she said, "He said not to worry about it." (Trial Tr. 103.)
{¶16} Semple explained on cross-examination that the dance company was not actually using the space during these last few months because of Covid-19, but they did keep their dance studio property there. The dance classes were being held outside and at another location because of the pandemic. They had very low enrollment numbers. (Trial Tr. 128-129.)
{¶17} C&C vacated the premises on October 30, 2020. Semple agreed the photos of the units accurately depicted the condition of the premises when they left. They intended to return to remove trash, but according to Kimberly, Vidale had changed the locks. They left mirrors hanging on the walls and a pile of trash. Semple said that they did not contact Vidale in order to gain access and finish their clean up. She stated, "[w]hen you're told you have to stay away that's what you do." (Trial Tr. 110-117.)
{¶18} No party or individual who was present when either lease agreement was negotiated or executed testified at trial.
{¶19} The parties submitted proposed findings of fact and conclusions of law, and the trial court issued judgment in Appellee's favor on March 17, 2023. The court rejected Appellants' statute of conveyances and statute of frauds arguments. It explained the leases were for a term of less than three years, and the leases were validated via the parties' partial performance since Appellants had occupied the space and paid rent for more than a decade.
{¶20} The trial court found there was no ambiguity in either lease agreement and that the "Tenant" as defined in both included the limited liability company and its members. The court stated in part: "the Court holds that all Defendants are parties to both Lease Agreements and that they are jointly and severally liable for Plaintiffs damages. The plain language of the Lease Agreements defines the Tenant as, 'Concepts & Creativity LLC Members dba Dance Studio.' This description, although unusual, is plain, ordinary language." (March 17, 2023 Judgment). And upon assigning meaning to all words in the contract, the court found the word "Members" in the "Tenant" definition made the members, Kimberly and Edward, personally liable, in addition to the company. (March 17, 2023 Judgment).
{¶21} The trial court found Kimberly personally guaranteed both leases, whereas Edward only personally guaranteed the second lease agreement. It found Appellants had breached the lease agreements and awarded damages to Appellee in the amount of $7,253.50 against all Appellants joint and several, i.e., C&C, Edward, and Kimberly. It further concluded there was no just reason for delay. (March 17, 2023 Judgment). Appellants collectively appealed the court's judgment.
{¶22} The trial court granted Appellants' requested stay of its judgment pending appeal.
Personal Liability for Lease Agreements
{¶23} Appellants consolidate their first three assigned errors, which assert:
"The trial court erred when it: (I) Found the leases to be unambiguous and interpreted the lease terms in a light most favorable to the drafter instead of the non-drafting party; (II) Found Kim Lisowski personally liable on the 1st lease as a lessee and guarantor; and (III) Found Kim and Ed Lisowski both personally liable on the 2nd lease a lessees and guarantors."
{¶24} Appellants first contend the lease agreements are ambiguous as to who the "tenant" or "lessor" is, and thus, they assert both leases should be construed against Appellee. Appellants claim that both leases are only binding on their company, and not Edward and Kimberly individually.
{¶25} Second, Appellants claim the guarantee set forth in paragraph 22 of both leases is not binding in light of the manner that Edward and Kimberly signed the contract
as "members" of the LLC, not in their individual capacities. Consequently, Appellants claim the court erred by finding their signatures, in which they indicate they were signing in a representative capacity, also bound them as personally guaranteeing the leases. Appellants claim the trial court's judgment finding them personally responsible must be reversed. For the following reasons, we disagree.
{¶26} This...
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