Savoy Hospitality, LLC v. 5839 Monroe Street Associates, LLC
| Decision Date | 27 November 2013 |
| Docket Number | CI-2011-02783 |
| Parties | SAVOY HOSPITALITY, LLC d/b/a Melting Pot Restaurant, et al., Plaintiffs, v. 5839 MONROE STREET ASSOCIATES, LLC. d/b/a Monroe Associates, LLC, Defendant. |
| Court | Ohio Court of Common Pleas |
Amy L. Butler, Esq., Anthony J. Calamunci, Esq., Roetzel & Andress LPA Attorneys for the plaintiffs
Erik G. Chappell, Esq., Julie A. Douglas, Esq., Lyden Liebenthal & Chappell Attorneys for the defendant
JOURNAL ENTRY
This is a lawsuit by a commercial tenant, [1] a restaurant, and the personal guarantors of the lease, against the landlord alleging breach of contract. The defendant landlord counterclaimed for breach of contract. Ultimately, the parties reached a written settlement agreement that the court enforced by an entry journalized May 18, 2012. That entry required the plaintiffs to complete certain work and the defendant to then return the plaintiffs' security deposit.
All of the work is now finished and the plaintiffs have filed a motion to enforce the court's order of May 18 seeking a separate order requiring the return of the security deposit.[2] The defendant has opposed that motion and filed its own motion for the recovery of attorney's fees. The plaintiffs, in turn, opposed the defendant's motion for attorney's fees and filed their own motion for attorney's fees.
The court held a hearing on the three pending motions on November 14, 2012 and this entry follows.
A detailed statement of facts is included in the court's May 18 entry. By way of summary, each party alleged that the other breached the lease. A settlement agreement was signed on October 25, 2011. On January 19, 2012, the plaintiffs filed a motion to enforce the settlement agreement because the defendant was treating it as void by resuming the prosecution of its counterclaims. The May 18 entry enforced the settlement agreement by ordering the plaintiffs to replace light switches and fixtures, remove remaining pieces of a walk-in refrigerator, replace awnings and a speaker/stereo system, and clean the premises.
The May 18 entry also ordered the defendant to return the plaintiffs security deposit once the plaintiff performed its obligations under the order. The parties agreed at the November 14 hearing that all of the plaintiffs' work has been done and that the security deposit has not been returned. The evidence admitted at the hearing included testimony from plaintiffs' counsel Anthony Calamunci, plaintiffs' exhibits 1 through 4, and all of the defendant's exhibits attached to Monroe's motion for attorney's fees.
By its motion for attorney's fees, Monroe argues that Savoy's post-settlement agreement conduct - namely, "rather than cooperate, the [plaintiff] forced [Monroe] to expend substantial effort and attorney fees to secure [Savoy's] performance of [Savoy's] obligations under the Settlement Agreement"[3] - caused the defendant to incur attorney's fees that are compensable under the terms of the contract and pursuant to common law.
In their own motion for legal fees and expense, the plaintiffs argue that the defendant's motion is frivolous and that they should be awarded their own attorney's fees in connection with defending the motion as a sanction under section 2323.51 of the Ohio Revised Code and Rule 11 of the Ohio Rules of Civil Procedure.
The defendant's claim for attorney's fees under the contract
Ohio has long adhered to the "American rule" with respect to recovery of attorney fees: a prevailing party in a civil action may not recover attorney fees as a part of the costs of litigation. Wilborn v. Bank One Corp., 121 Ohio St.3d 546, 2009-Ohio-306, ¶7. However, there are exceptions to this rule and attorney fees may be awarded when an enforceable contract specifically provides for the losing party to pay the prevailing party's attorney fees, or when the prevailing party demonstrates bad faith on the part of the unsuccessful litigant. Id.
Like any written contract, the interpretation of an agreement to pay another party's attorney's fees is a question of law. See, e.g., Fabrication Group LLC v. Willowick Partners LLC, 11th Dist. No. 2011-L-141, 2012-Ohio-4460, ¶36. Absent ambiguity in the language of the contract, the parties' intent must be determined from the plain language of the document. Id.
The settlement agreement includes monetary terms at paragraphs 2 and 5. The nonmonetary terms include a provision that Monroe "shall conduct a physical examination of the Premises" after Savoy is gone "to determine items of repair and replacement" and then notify the plaintiff of those things that need to be repaired or replaced. The agreement goes on to say:
The contract anticipates that Savoy might not undertake the repairs that Monroe determines are necessary and provides two ways to address that circumstance. The first is an "appropriate legal proceeding" by Monroe to hold Savoy to the settlement. A motion to enforce the settlement agreement is such a proceeding. The second is that Monroe would make the repairs at its own expense and then get reimbursement of the repair costs from the plaintiffs. Only if Savoy did not then reimburse the costs, Monroe could institute "appropriate legal proceedings" to recover the repair costs and its attorney's fees.
By its terms, the contract allows the defendant to recover its "costs of collection" only when Savoy "fail[s] or refuse[s] to timely reimburse" the defendant for repair expense. That did not happen in this case. While there is no question that the plaintiffs did not perform some of their obligations under the agreement - otherwise the court would not have ordered, by the May 18 entry, that Savoy take action to comply with the settlement terms - there is also no question that Monroe did not "implement such repair, replacement or remediation" at its expense, hence there was nothing for the plaintiff to "timely reimburse" and the cost of collection...
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