Oldendick v. Crocker

Citation70 N.E.3d 1033,2016 Ohio 5621
Decision Date01 September 2016
Docket NumberNo. 103384.,103384.
Parties Elisabeth L. OLDENDICK, Plaintiff–Appellant v. Winslow CROCKER, et al., Defendants–Appellees.
CourtUnited States Court of Appeals (Ohio)

Helen M. Kendrick, West Chester, OH, for Appellant.

Lewis A. Zipkin, In Son J. Loving, Zipkin Whiting Co., L.P.A., Beachwood, OH, for Appellees.

Before: E.A. GALLAGHER, P.J., KILBANE, J., and STEWART, J.

EILEEN A. GALLAGHER, P.J.

{¶ 1} Appellant Elisabeth Oldendick appeals from a judgment of the Cleveland Heights Municipal Court in favor appellees Winslow Crocker and Anna Crocker (collectively, "appellees") on Oldendick's amended complaint and appellees' counterclaim. Oldendick contends that the trial court erred in permitting appellees to retain $1,720 that she had paid for the first month's rent and security deposit following her anticipatory breach of an apartment lease. She further contends that she was entitled to recover double the amount of her security deposit as damages under R.C. 5321.16(C). For the reasons that follow, we reverse the trial court's judgment and remand the matter for further proceedings.

Factual Background and Procedural History

{¶ 2} In September 2013, Oldendick and her then-boyfriend Forrest Ostrander (collectively, the "lessees") were looking for an apartment to rent in the Cleveland area. After seeing an advertisement on Craigslist, Oldendick and Ostrander met with Luibov Rudyvk, appellees' rental agent, who showed them various properties available for rent. One of the properties was an apartment located at 1642 Belmar Road, # 2, in Cleveland Heights (the "Belmar apartment" or the "property"). Oldendick and Ostrander told Rudyvk that they were interested in renting the Belmar apartment and Rudyvk gave them rental applications to complete. On September 10, 2013, Oldendick and Forrester returned their rental applications and met with Rudyvk to sign a one-year lease for the Belmar apartment commencing October 1, 2013 and ending September 30, 2014 (the "lease" or the "lease agreement").

{¶ 3} Anna Crocker owned the property and her son, Winslow Crocker ("Crocker"), was responsible for renting and managing the property. Crocker's company, Urban Restoration Project, was identified as the "lessor" in the lease and his contact information appeared at the top of the lease. At the time the lease agreement was signed, Urban Restoration Project was not registered with the Ohio Secretary of State. Crocker registered "Urban Restoration Project LLC" with the Ohio Secretary of State in March 2015.

{¶ 4} Under the lease, a monthly payment of $860 was due on the first day of the month and an $860 security deposit was also required. Although the lease indicates that $860 is the "monthly rent" for the Belmar apartment, the parties stipulated that "[t]he rent amount under the lease was $800/month, with an additional $60/month fee for [Oldendick's] dog."1 Crocker testified that, when a tenant has a pet, he adds a pet fee to the monthly rent payment for "a number of reasons," including because "[t]hey may cause extra noise, or extra problems, and possibly damage." All payments due under the lease were to be made in cash or by check or money order payable to Crocker. Oldendick testified that she understood that Crocker was the landlord for the apartment at the time she signed the lease.

{¶ 5} The lease included an "early termination" provision, which provides:

LESSEE(S) MUST NOTIFY LESSOR SIXTY (60) DAYS PRIOR TO EARLY TERMINATION OF THIS AGREEMENT. IF LESSOR SO CHOOSES TO AGREE TO AN EARLY TERMINATION OF THIS AGREEMENT, LESSEE(S) AGREES TO PAY A FEE OF ONE MONTH'S RENT IN ADDITION TO THE REGULAR RENT UNTIL A TENANT SUITABLE TO LESSOR EXECUTES A NEW LEASE TERM.

{¶ 6} Prior to signing the lease, Oldendick read through the entire document. She testified that she reviewed and understood each provision including the early termination provision. After she signed the lease, Oldendick gave Rudyvk a check payable to Crocker in the amount of $1,720 for the first month's payment and the security deposit. Rudyvk told Oldendick that she would give her the keys for the Belmar apartment and a signed copy of the lease by her move-in date, October 1, 2013. Rudyvk then returned the lease to Crocker who signed the lease in his own name as, and for, Urban Restoration Project and negotiated the check from Oldendick. Oldendick never received the keys to the Belmar apartment and did not receive a copy of the executed lease until sometime in early November 2013.

{¶ 7} On September 13, 2013, three days after Oldendick and Ostrander signed the lease, Oldendick called Rudyvk and told her that she and Ostrander had changed their minds, i.e., that they would not be moving to Cleveland Heights and, therefore, no longer needed to rent the apartment. Rudyvk responded that she would speak with Crocker about the matter.2

{¶ 8} Oldendick called Rudyvk again the following day and asked if she had spoken with Crocker. Rudyvk replied that she had not yet contacted him but that she would do so the following Monday. A day or two later, Oldendick again called Rudyvk. She informed Rudyvk that she wanted Crocker to return her $1,720 and requested Crocker's telephone number. Rudyvk texted Crocker's telephone number to Oldendick and Oldendick forwarded the number to her mother, attorney Helen Kendrick. Neither Oldendick nor Ostrander ever took possession of the apartment.

{¶ 9} Attorney Kendrick thereafter called Crocker and demanded the return of the $1,720 Oldendick had paid when she and Ostrander signed the lease. Crocker said that he would talk with his attorney about the situation. On September 28, 2013, Attorney Kendrick emailed a letter to Crocker, confirming their conversation. In her letter, Attorney Kendrick indicated that Oldendick had "repudiated" the lease on September 13, 2013, and demanded the return of the $1,720 Oldendick had paid for the October 2013 rent and the security deposit for the Belmar apartment. Attorney Kendrick requested that the money be refunded via a cashier's check or money order payable to Oldendick and sent to Attorney Kendrick at her address.

{¶ 10} That same date, Oldendick entered into a thirteen-month lease for an apartment in Marsol Towers in Mayfield Heights (the "Marsol apartment"). The lease commenced on September 28, 2013, at a lower monthly rent than the Belmar apartment.3

{¶ 11} On or around September 20, 2013, Crocker began advertising on Craigslist that the Belmar apartment was again available for rent. Crocker claimed that although he had several other vacant apartments he could have rented to prospective tenants, he directed Rudyvk to show the Belmar apartment to prospective tenants first. After approximately eight showings of the Belmar apartment, Crocker leased the Belmar apartment to a new tenant. The new lease was executed on October 22, 2013, and commenced on November 1, 2013. The monthly rent was $810, $50 a month less than the monthly payment under Oldendick's lease, but $10 more than the monthly rent under Oldendick's lease because the new tenant did not have a dog. Crocker paid Rudyvk $120 for her time in showing the apartment to prospective new tenants and an additional $100 in commission for the newly executed lease.

{¶ 12} On October 25, 2013, Attorney Kendrick sent a second letter to appellees, again demanding that appellees refund the $1,720 Oldendick paid to lease the Belmar apartment. On or about November 4, 2013, Crocker sent a response, indicating that he would not be returning the funds Oldendick had paid him because appellees had been unable to re-rent the Belmar apartment until November 1, 2013 and, according to the terms of the lease, Oldendick was responsible for the October rent and an early termination fee of one month's rent. Crocker enclosed copies of the lease Oldendick had signed and a copy of the lease with the new tenant.

{¶ 13} On November 18, 2013, Oldendick filed a complaint in the Cleveland Heights Municipal Court against Crocker and Anna Crocker, individually and d.b.a. Urban Restoration Project, seeking to recover (1) the $1,720 she paid for the first month's rent and security deposit under the lease, (2) "an equal amount as damages" and (3) attorney fees and costs.4 Oldendick thereafter filed an amended complaint adding a claim for declaratory relief and seeking a declaration that the lease was void and unenforceable.

{¶ 14} On December 27, 2013, appellees filed their answer, raising a laundry list of affirmative defenses, and a counterclaim against Oldendick for "bad faith—breach of contract" based on her alleged misrepresentations to Crocker that she wanted to terminate the lease because she was moving to another state and no longer needed an apartment in Cleveland and her "unsupported claims of fraud and unjust enrichment" against appellees. Appellees sought to recover compensatory and punitive damages, attorney fees and costs. Oldendick filed a reply to the counterclaim, asserting that appellees had failed to state a claim for which relief could be granted, that appellees lacked standing to assert a counterclaim for breach of the lease and that punitive damages were not recoverable on appellees' breach of contract claim.

{¶ 15} The case proceeded to a bench trial. On July 10, 2015, the trial court issued its decision, finding in favor of appellees on both Oldendick's amended complaint and appellees' counterclaim. The trial court determined that Oldendick and Ostrander had entered into a valid lease with Crocker on or about September 10, 2013, and that the parties were "at that point bound by the terms and conditions of the lease agreement." The trial court further found that Oldendick had breached the lease agreement by repudiating the lease and refusing to take possession of the leased premises and that Crocker had taken reasonable steps to re-rent the Belmar apartment and mitigate his damages. The trial court concluded that the early termination provision was valid...

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