Reynoldsburg v. Shoe Show, Inc.
| Decision Date | 29 September 2020 |
| Docket Number | Case No. 2:18-cv-1190 |
| Parties | DN REYNOLDSBURG, Plaintiff, v. SHOE SHOW, INC., Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
OPINION & ORDER
This matter is before the Court on the cross motions for summary judgment by Plaintiff DN Reynoldsburg and Defendant Shoe Show, Inc. ("Shoe Show"). (ECF No. 47, No. 48). For the reasons set forth below, this Court DENIES the parties' cross-motions for summary judgment. (ECF No. 47, No. 48).
Plaintiff, DN Reynoldsburg, the owner of a shopping center, rented retail space to Defendant, Shoe Show, pursuant to a lease contract ("the lease") in October 2015. (ECF No. 3 at ¶ 5). The lease required Defendant to make regular monthly rent payments of $10,833.33. Id. at ¶ 6. The lease contains several provisions, however, that permit Defendant to pay 5% of gross sales until three major co-tenants open and operate in the building. Plaintiff alleges that Shoe Show breached the lease by failing to pay the full amount of rent due pursuant to Section 15.3 of the lease. Defendant argues that the lease, in Section 15.2, actually permits it to pay a lower amount of rent, 5% of gross sales, until Plaintiff has satisfied an opening condition, which is the opening of three particular retailers in the shopping center: Sports Authority, TJ Maxx, and Maurices.
Sports Authority, however, never opened for business in the shopping center and never will. The retailer filed for bankruptcy in March 2016 and rejected the lease it signed with DN Reynoldsburg. (ECF No. 48 at 4). Shoe Show opened for business in August of 2016, after learning that Sports Authority filed for bankruptcy. Id. at 5. DN Reynoldsburg leased the space Sports Authority was to occupy to a furniture store, Rooms for Less, in November 2017. Id. at 5-6. Plaintiff argues that upon leasing the space to Rooms for Less, Plaintiff notified Defendant that it was obligated to pay the full amount of rent due pursuant to Section 15.3 of the lease. Id. at 6. Defendant argues Plaintiff is merely unsatisfied with the deal it has made and that as written, the lease permits it to continue to pay 5% of gross sales indefinitely. (ECF No. 47 at 1-2).
Plaintiff filed suit in the Franklin County Court of Common Pleas on September 9, 2018, alleging that Defendant had breached the lease by not paying full rent. (ECF No. 3). Defendant removed the matter to this Court on October 5, 2018. (ECF No. 1). After engaging in discovery, Plaintiff and Defendant filed cross-motions for summary judgment. (ECF No. 48). The matter is ripe for review.
A motion for summary judgment is governed by the requirements of Federal Rule of Civil Procedure 56. Summary judgment is appropriate "if the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56. A fact is material only if it "might affect the outcome of the lawsuit under the governing substantive law." Wiley v. United States, 20 F.3d 222, 224 (6th Cir. 1994) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). In evaluating a motion for summary judgment, theevidence must be viewed in the light most favorable to the nonmoving party. S.E.C. v. Sierra Brokerage Servs., Inc., 712 F.3d 321, 327 (6th Cir. 2013).
Summary judgment is inappropriate, however, "if the dispute about a material fact is 'genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. The necessary inquiry for this Court is "whether 'the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Patton v. Bearden, 8 F.3d 343, 346 (6th Cir. 1993) (quoting Anderson, 477 U.S. at 251-52). The mere existence of a scintilla of evidence in support of the opposing party's position is not enough to survive summary judgment; there must be evidence on which the jury could reasonably find for the opposing party. See Anderson, 477 U.S. at 251; Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir. 1995). It is proper to enter summary judgment against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Courts deciding actions brought pursuant to diversity jurisdiction generally apply the law of the forum state. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). The parties do not dispute that Ohio law applies to their contract dispute. When applying Ohio law, district courts must "follow the decisions of the state's highest court when that court has addressed the relevant issue." Talley v. State Farm Fire & Cas. Co., 223 F.3d 323, 326 (6th Cir. 2000). The Sixth Circuit requires courts to "anticipate how the relevant state's highest court would rule in the case and are bound by controlling decisions of that court" when "the issue has not been directly addressed." Savedoff v. Access Group, Inc., 524 F.3d 754, 762 (6th Cir. 2008) (quoting In re Dow Corning Corp., 419 F.3d 543, 549 (6th Cir.2005)). The decisions of intermediate stateappellate courts are "also viewed as persuasive unless it is shown that the state's highest court would decide the issue differently." Savedoff, 524 F.3d at 762.
Plaintiff argues that Defendant has breached the lease agreement between them by failing to pay the full amount of rent due. (ECF No. 47). In Ohio, a breach of contract claim requires a plaintiff to show: (1) the existence of a contract; (2) performance by the plaintiff; (3) breach by the defendant; and (4) damage or loss to the plaintiff. See Wellington Resource Group LLC v. Beck Energy Corp., 975 F. Supp. 2d 833, 837 (S.D. Ohio 2013). Plaintiff and Defendant do not contest the existence of a contract but do contest whether Plaintiff has sufficiently performed and whether Defendant has breached the contract. Plaintiff and Defendant agree that the facts of this case are not in dispute and that the sole issue for this Court is whether the lease agreement between the parties requires Shoe Show to pay full rent after Rooms for Less opened for business in the space in which Sports Authority was initially planned to operate. (ECF No. 47, No. 48).
Plaintiff argues that Section 15.3 of the lease required Shoe Show to pay full rent once Rooms for Less opened and that Defendant's interpretation of the lease is unreasonable "because it does not account for all of the provisions of the lease and the structure of the lease, and because its interpretation results in a penalty provision that is unenforceable under Ohio law." (ECF No. 48 at 2). Defendant argues that the lease requires it to pay full rent only upon satisfaction of the opening condition outlined in Section 15.2, which is that Sports Authority, TJ Maxx, and Maurices open for business.
The interpretation of the language of a written agreement and whether it is ambiguous is a question of law and may be resolved summarily. Savedoff v. Access Group, Inc., 524 F.3d 754, 763 (6th Cir. 2008) (applying Ohio law). If a contract is ambiguous, however, then a "factualdetermination of intent or reasonableness may be necessary to supply the missing term." Id. (quoting Inland Refuse Transfer Co. v. Browning-Ferris Indus. of Ohio, Inc., 15 Ohio St.3d 321, 474 N.E.2d 271, 272-73 (Oh. 1984)). When a court examines a contract to determine its meaning, it is required to "ascertain the intent of the parties" as that intent is expressed in "the language they choose to use in their agreement." Graham v. Drydock Coal Co., 667 N.E.2d 949, 952 (Oh. 1996).
An ambiguity must be apparent on the face of the contract, and extrinsic evidence is not permissible to "create an ambiguity." Covington v. Lucia, 784 N.E.2d 186, 190 (Ohio App. 10th Dist. 2003). A contractual provision is ambiguous only where "its meaning cannot be determined from the four corners of the agreement or where the language is susceptible of two or more reasonable interpretations." Id. To determine whether contractual language is ambiguous, a court is required to analyze the contract "as a whole" and "give reasonable effect to every provision in the agreement." Savedoff, 524 F.3d at 763 ().
Plaintiff and Defendant each argue that the contract is clear and that their interpretation is the correct one. Accordingly, this Court must first determine whether Plaintiff and Defendant's interpretations are reasonable. If both interpretations are reasonable, this Court must then examine the intent of the parties as a factual matter. When interpreting contractual language, Ohio courts "look to the plain and ordinary meaning of the language used in the contract unless another meaning is clearly apparent from the contents of the agreement." Sunoco, Inc. (R & M) v. Toledo Edison Co., 953 N.E.2d 285, 292 (Oh. 2011). Contractual provisions that can be given a "definite legal meaning" are unambiguous. Id. Common words or language are "given theirordinary meaning unless manifest absurdity results or unless some other meaning is clear from the face or overall contents of the agreement." Bev. Holdings, L.L.C. v. 5701 Lombardo, L.L.C., 2019-Ohio-4716 (Oh. 2020).
Defendant argues that the only section of the contract that is relevant to the dispute is § 15.2, which describes the conditions of opening for Shoe Show. (ECF No. 49 at 9-10). According to Defendant, § 15.2 permits it to pay percentage rent until the satisfaction of the opening condition. Id. at 10. Section 15.3, Shoe Show claims, "is only relevant once the...
To continue reading
Request your trial