Joseph Bros. Co. v. Dunn Bros., Ltd.

• Decision Date: 22 November 2019
• Docket Number: No. L-18-1229,L-18-1229
• Citation: 2019 Ohio 4821,148 N.E.3d 1260
• Parties: JOSEPH BROTHERS COMPANY, LLC, Appellant v. DUNN BROS., LTD., et al., Appellee
• Court: Ohio Court of Appeals

148 N.E.3d 1260

2019 Ohio 4821

JOSEPH BROTHERS COMPANY, LLC, Appellant

v.DUNN BROS., LTD., et al., Appellee

No. L-18-1229

Court of Appeals of Ohio, Sixth District, Lucas County.

Decided: November 22, 2019

DECISION AND JUDGMENT

OSOWIK, J.

Introduction

{¶ 1} This case concerns a dispute over an agreement that created an access license and a sign easement. The agreement was created in 1985 between Joseph Brothers Company, a predecessor to the plaintiff-appellant, Joseph Brothers Company, LLC, and Dunn Brothers, a predecessor to the defendant-appellee, Dunn Bros., Ltd.

{¶ 2} Generally, the access license allowed Dunn Brothers and its customers to traverse across the property of Joseph Brothers Company. The agreement also allowed Dunn Brothers to install a sign identifying its auto sales business on Joseph Brothers' property.

{¶ 3} On November 17, 2014, the Joseph Brothers Company, LLC (hereinafter "appellant") filed a seven-count complaint in the Lucas County Court of Common Pleas against Dunn Bros., Ltd. (hereinafter "Dunn") and Toledo Sign Company. As against Dunn, appellant filed an action for a declaratory judgment that the access license had been extinguished through "abandonment" and/or that it terminated by its own terms (Count 1); an action for a declaratory judgment that the sign easement "must be restricted" (Count 2); an action for a declaratory judgment that the sign easement has been terminated and that the sign must be removed (Count 3); an action to quiet title, pursuant to R.C. 5303.01 (Count 4); and an action in trespass with respect to the non-conforming sign (Count 5). Appellant filed a separate trespass claim against Toledo Sign Company (Count 6) and a claim as to both defendants for punitive damages (Count 7). Appellant voluntarily dismissed Toledo Sign from the case on July 6, 2015.

{¶ 4} Both parties filed motions for summary judgment. On October 1, 2018, the trial court found that there were no material questions of fact that would permit termination of either the access license or the sign easement and that Dunn was entitled to judgment as a matter of law as to all claims asserted against it. As set forth below, we affirm, in part, and reverse, in part.

The 1985 Agreement

{¶ 5} In 1985, the Joseph Brothers Company owned commercial property to the south of, and bordering, State Route 2 in Oregon, Ohio. State Route 2 (a.k.a. Navarre Avenue) is a "main commercial thoroughfare." Joseph Brothers Company operated a commercial shopping center on the property, which stretched from State Route 2 to Dustin Road. Dustin Road is one block to the south, and runs parallel to State Route 2. It owned an additional parcel of land to the south of Dustin Road. On December 27, 1985, it sold that additional parcel to Dunn Brothers. Dunn Brothers purchased the property for the purpose of operating its car dealership. Thus, after the sale, and from north to south, the order was State Route 2, the Joseph property, Dustin Road, the Dunn property.

{¶ 6} The Dunn property had no direct access to State Route 2. Therefore, in connection with the sale, the parties entered into an agreement, titled "License Agreements," (hereinafter "the Agreement") consisting of two parts. One part granted Dunn Brothers and its customers "continuous, uninterrupted access" across the Joseph property from State Route 2 to access the Dunn property (the "access license"). The second part granted Dunn Brothers an "irrevocable and perpetual license" to install an "identification sign" on the Joseph property, near State Route 2, so that it could identify its car dealership (the "sign license"). The Agreement is set forth in full below:

LICENSE AGREEMENTS

JOSEPH BROTHERS COMPANY, an Ohio general partnership, hereinafter referred to as "Grantor", in consideration of the purchase by the below Grantee from Grantor of certain real property describe on Exhibit "A" attached hereto and made a part hereof, which said property fronts on Dustin Road, a dedicated thoroughfare in the City of Oregon, Lucas County, Ohio (the "Benefitted Property"), does hereby grant to DUNN BROTHERS, its employees, customers, and invitees, an Ohio general partnership, the purchaser of the Benefitted Property, hereinafter referred to as "Grantee", a license for continuous, uninterrupted access to and from the Benefitted Property across Dustin Road to State Route 2 (Navarre Avenue) for vehicular and pedestrian traffic over and across a certain portion of real estate owned by Grantor described on Exhibit "B" attached hereto (the "Burdened Property"), which certain portion is fully described on Exhibit "C" attached hereto and designated as "Access License" on the Plot Plan attached hereto as Exhibit "D" (the "Access License"). The Access License shall remain in effect so long as Grantee is the record owner of the Benefitted Property.

The Access License shall at all times be maintained by Grantor and Grantor shall keep it reasonably free of debris, snow and other impediments. The Access License may be relocated from time to time by Grantor within the Burdened Property, provided it is at all times twenty (20) feet in width and provides access to and from State Route 2 (Navarre Avenue) from the Benefitted Property consistent with this Agreement.

Grantor also hereby grants to Grantee an Irrevocable and perpetual license to erect and maintain a single pole identification sign advertising Grantee's business on the Benefitted Property ("Sign License") over, under and upon the area so designated on Exhibit "D" ("Sign License Area") for the purpose of identifying Grantee's business operations on the Benefitted Property. Any such sign shall be installed on the Sign License Area in conformance with all applicable codes and ordinances of the City of Oregon and shall contain a maximum of one hundred twenty-five (125) square feet on each face.

The Sign License shall run with the land and be binding upon and inure to the benefit of Grantor and Grantee and their respective successors and assigns, and the Access License shall be binding upon and inure to the benefit of Grantee and Grantor, and Grantor's successors and assigns.

IN WITNESS WHEREOF, the Grantor has executed this Agreement on the 27^th day of December, 1985.

JOSEPH BROTHERS COMPANY, an Ohio general partnership

The dispute over the Dunn's right of access

{¶ 7} According to appellant, Dunn Brothers transferred the Dunn property (also referred to herein as the "benefited property") to Dunn on August 15, 1997.¹ Appellant claims that, because the access license remained in effect only "so long as" the "Grantee" (defined as "Dunn Brothers * * * an Ohio general partnership") was the "record owner" of the benefited property, the access license terminated upon Dunn Brothers' transfer of the property. Appellant argues that Dunn is "merely a successor" to Dunn Brothers, with "no rights under the Access License." In further support of its argument, appellant points to the absence of any "successor and assign" language with respect to Dunn Brothers' rights under the access license. That is, the Agreement provides that the access license shall be binding upon and inure to the benefit of "Grantee and Grantor, and Grantor's successors and assigns." By contrast, the Agreement provides that the sign license shall run with the land and be binding upon and inure to the benefit of "Grantor and Grantee and their respective successors and assigns." Appellant claims that the absence of language including the grantee's successors and assigns—with respect to the access license—was purposeful and "reinforces the conclusion that the [access license] is no longer in effect because Dunn [Brothers] no longer owns the [benefited] property."

{¶ 8} In addition, appellant argues that the access license was "extinguished through abandonment and a material change in the circumstances giving rise to the creation of the [Access] License." According to appellant, the city of Oregon constructed a "new" public roadway, called Harbor Drive, in 1995 that connects State Route 2 and Dustin Road and runs adjacent to, and just west of, the Dunn Property. In its complaint, appellant claimed that "the purpose of [the] Access License was to allow traffic to access" the Dunn Property because "there was no direct public street access" from State Route 2 to the Dunn Property. With the construction of Harbor Drive, appellant claims that an issue of fact exists with respect to whether the purpose of the access license has been rendered obsolete.

{¶ 9} In response, Dunn maintains that the access right was not extinguished "merely because of a change in ownership." It stresses that the sole principles of each organization (Thomas Dunn and James Dunn) remained the same and that the reorganization from partnership to limited liability company was nothing more than a "natural evolution [that occurred] when limited liability companies were recognized by Ohio statute." Dunn adds that the intent of the contracting parties was to provide a right of access "as long as the Dunns owned the property and dealership." With respect to the creation of Harbor Drive, Dunn argues that the access license still serves the purpose for which it was created and that it was neither abandoned nor rendered obsolete.

{¶ 10} The trial court found that Dunn was entitled to judgment as a matter of law as to both issues. That is, it found that the change from partnership to limited liability company did not result in a change in ownership of the property "for purposes of the access agreement" because both entities are owned by the same individuals, i.e., James Dunn and Thomas Dunn and therefore there was no basis "for termination of the access license." Similarly, it found that "[t]he fact that there is now a second manner of access to Dunn's property does not negate that the fact that access can still be obtained by using [appellant's] property [and] [t]herefore the purpose of the license still exists."

The dispute over the sign

{¶ 11}...