Iii v. Wilcox

• Citation: 940 N.E.2d 1026,190 Ohio App.3d 133
• Decision Date: 30 September 2010
• Docket Number: No. 10AP–206.,10AP–206.
• Parties: CAPELLA III, L.L.C. et al., Appellants,v.WILCOX; Dabbert, Appellee.
• Court: United States Court of Appeals (Ohio)

190 Ohio App.3d 133

940 N.E.2d 1026

2010 -Ohio- 4746

CAPELLA III, L.L.C. et al., Appellants,

v.WILCOX; Dabbert, Appellee.

No. 10AP–206.

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

Decided Sept. 30, 2010.

Madison & Rosan, L.L.P., Kristin E. Rosan, and Darcy A. Shafer, Columbus, for appellants.Mann & Preston and James L. Mann, for appellee.KLATT, Judge.

[Ohio App.3d 136] {¶ 1} Plaintiffs-appellants, Capella III, L.L.C. and Village Square Retail, L.L.C., appeal from a judgment in favor of defendant-appellee, Patricia Bick, now known as Patricia E. Dabbert. For the following reasons, we affirm in part and reverse in part.

{¶ 2} In March 2000, Robert Wilcox and Dabbert formed Proper Puppy, Inc., an Ohio corporation. Wilcox and Dabbert planned to operate My–T–Fine Dog Gym, a dog training and day-care business, through their corporation. On March 29, 2000, Wilcox and Dabbert executed a five-year lease with Weybridge–Village Square, L.L.C. (“Weybridge”) for retail space located in the Village Shopping [Ohio App.3d 137] Center. Although Wilcox and Dabbert intended to use the space for their business, they both signed the lease in their individual, not corporate, capacities.

{¶ 3} In May 2000, Wilcox and Dabbert opened My–T–Fine Dog Gym for business. Dabbert quickly became disenchanted with Wilcox, and in June 2000, she sold her shares in Proper Puppy, Inc. to Wilcox. Thereafter, Wilcox operated My–T–Fine Dog Gym without Dabbert's involvement.

{¶ 4} The lease for the Village Shopping Center retail space ended on April 30, 2005. Wilcox, however, continued to occupy the premises and remit monthly rental payments to Weybridge. Instead of evicting Wilcox, Weybridge accepted the rental payments.

{¶ 5} In November 2005, Wilcox signed an estoppel certificate at Weybridge's request. Weybridge sought the estoppel certificate as part of its preparations to sell the Village Shopping Center to appellants. In the estoppel certificate, Wilcox represented that the lease was in full force and effect and that the lease was for a month-to-month term.

{¶ 6} The estoppel certificate included a space for Dabbert to sign, but that space was manually crossed out. This deletion is consistent with an e-mail that the property manager for the Village Shopping Center sent to appellants in November 2005, which stated:

Patricia Bick [Dabbert] who originally signed the Lease with Robert Wilcox has not been involved in the business since May of 2000 per the attached letter dated December 13, 2000. Robert Wilcox does not know her whereabouts and has been responsible for the lease since May of 2000. Furthermore, the lease is month-to-month.

{¶ 7} Appellants purchased the Village Shopping Center in December 2005, and as part of the sale, Weybridge assigned to appellants all of the leases for retail spaces in the Village Shopping Center. Approximately two months later, Wilcox failed to make his monthly rental payment. Although Wilcox submitted a $3,000 check to appellants in March 2006, he otherwise defaulted on his payment obligations under the lease. Wilcox vacated the premises in June 2006, by which time he owed appellants $21,333.66 for unpaid rental payments, operating expenses, and late fees.

{¶ 8} On October 31, 2006, appellants filed suit against Wilcox and Dabbert for breach of contract. In the complaint, appellants acknowledged that the lease had expired, but they alleged that a holdover tenancy existed. Applying the terms of the lease to the holdover tenancy, appellants claimed that Wilcox and Dabbert owed them for unpaid rent and other charges as assessed under the lease. Dabbert answered the complaint, but Wilcox did not. Appellants sought, and received, a default judgment against Wilcox.

[Ohio App.3d 138] {¶ 9} Both appellants and Dabbert moved for summary judgment. The trial court denied both motions and referred the matter to a magistrate for trial. After a bench trial, the magistrate issued a decision finding that Dabbert was not a holdover tenant and that she was not liable for any amounts owed that accrued during the holdover tenancy. Despite appellants' objections, the trial court adopted the magistrate's decision.

{¶ 10} While the objections to the magistrate's decision were pending, Dabbert filed a motion for attorney fees. Dabbert claimed entitlement to attorney fees under Section 26(b) of the lease, which states:

If any legal action, arbitration or other proceeding is brought by either party to this lease against the other for the enforcement of this lease, * * * the successful or prevailing party shall be entitled to recover as an element of its damages, reasonable attorney's fees and all other costs incurred in that action or proceeding * * *.

{¶ 11} The trial court referred the motion to a magistrate. After an evidentiary hearing, the magistrate issued a decision in which he determined that the lease entitled Dabbert to reasonable attorney fees and legal costs and awarded Dabbert $10,978.66. Again, the trial court rejected appellants' objections and adopted the magistrate's decision. On February 10, 2010, the trial court issued a judgment entry that entered judgment in Dabbert's favor and awarded her attorney fees and costs.

{¶ 12} Appellants now appeal and assign the following errors:

1. The trial court erred as a matter of law when it denied appellants' motion for summary judgment.

2. The trial court abused its discretion when it adopted the magistrate's decision on the merits as such decision was unreasonable, arbitrary, unconscionable and contrary to law.

3. The trial court abused its discretion when it adopted the magistrate's decision on attorney fees as such decision was inconsistent with the decision on the merits and was unreasonable, arbitrary, unconscionable and contrary to law.

{¶ 13} By their first assignment of error, appellants argue that the trial court erred in denying their motion for summary judgment. Ordinarily, “the denial of a motion for summary judgment is not a point of consideration in an appeal from a final judgment entered following a trial on the merits.” Continental Ins. Co. v. Whittington (1994), 71 Ohio St.3d 150, 156, 642 N.E.2d 615. If a trial court denies a summary-judgment motion due to the existence of genuine issues of material fact, and a subsequent trial results in a verdict for the party who did not move for summary judgment, then any error in denying the motion [Ohio App.3d 139] for summary judgment is rendered moot or harmless. Id. To allow a summary-judgment decision based upon less evidence to prevail over a verdict reached on more evidence would defeat the fundamental purpose of judicial inquiry. Id. at 157, 642 N.E.2d 615.

{¶ 14} However, error in the denial of a summary-judgment motion that presents a purely legal question is not rendered harmless by a subsequent trial on the merits. Id. at 158, 642 N.E.2d 615; Miller v. Lindsay–Green, Inc., 10th Dist. No. 04AP–848, 2005-Ohio-6366, 2005 WL 3220215, ¶ 32. Consequently, an appellate court may review a denial of a motion seeking summary judgment on a pure question of law regardless of the movant's lack of success at trial. Sicklesmith v. Chester Hoist, 169 Ohio App.3d 470, 2006-Ohio-6137, 863 N.E.2d 677, ¶ 183; Miller at ¶ 32; Stewart v. Ohio Dept. of Rehab. & Corr., 10th Dist. No. 02AP–816, 2003-Ohio-588, 2003 WL 257511, ¶ 8. “In other words, when the alleged error in the denial of summary judgment is based purely on a question of law that must be answered without regard to issues of fact, then the denial of summary judgment is reviewable.” Promotion Co., Inc./Special Events Div. v. Sweeney, 150 Ohio App.3d 471, 2002-Ohio-6711, 782 N.E.2d 117, ¶ 15.

{¶ 15} Here, appellants sought summary judgment on legal grounds, the resolution of which did not depend on disputed issues of material fact. We thus conclude that a subsequent trial did not render harmless the asserted error in the denial of the summary-judgment motion. Therefore, we will consider the merits of appellants' argument that the trial court should have granted them summary judgment.

{¶ 16} Appellate review of summary-judgment motions is de novo. Andersen v. Highland House Co. (2001), 93 Ohio St.3d 547, 548, 757 N.E.2d 329. “ ‘When reviewing a trial court's ruling on summary judgment, the court of appeals conducts an independent review of the record and stands in the shoes of the trial court.’ ” Abrams v. Worthington, 169 Ohio App.3d 94, 2006-Ohio-5516, 861 N.E.2d 920, ¶ 11, quoting Mergenthal v. Star Banc Corp. (1997), 122 Ohio App.3d 100, 103, 701 N.E.2d 383. Civ.R. 56(C) provides that a trial court must grant summary judgment when the moving party demonstrates that (1) there is no genuine issue of material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made. Gilbert v. Summit Cty., 104 Ohio St.3d 660, 2004-Ohio-7108, 821 N.E.2d 564, ¶ 6.

{¶ 17} In their motion for summary judgment, and now on appeal, appellants argue that Dabbert failed to fulfill her obligations under a holdover tenancy that arose when Wilcox continued to occupy the retail space after the [Ohio App.3d 140] expiration of the lease. Appellants assert that Dabbert was a party to the holdover tenancy, and thus, she owes them for unpaid rent and other charges that accrued during the holdover tenancy.

{¶ 18} When a tenant fails to surrender the premises after the end of a lease, the law construes the tenant's continued occupancy as a proposal to lease the premises for another term. Buschman Co. v. Garfield Realty Co. (1917), 97 Ohio St. 54, 60, 119 N.E. 142; Gladwell v. Holcomb (1899), 60 Ohio St. 427, 435–437, 54 N.E. 473; Baltimore & Ohio RR. Co. v. West (1897), 57 Ohio St. 161, 168, 49 N.E. 344; Bill Swad Chevrolet, Inc. v. Ricart Jeep Eagle, Inc. (1998), 129 Ohio App.3d 501, 505, 718 N.E.2d 470....