Simbo Props., Inc. v. M8 Realty, L.L.C.

• Decision Date: 24 October 2019
• Docket Number: No. 107161,107161
• Parties: SIMBO PROPERTIES, INC., Plaintiff-Appellant, v. M8 REALTY, L.L.C., Defendant-Appellee.
• Court: Ohio Court of Appeals

149 N.E.3d 941

2019 Ohio 4361

SIMBO PROPERTIES, INC., Plaintiff-Appellant,

v.M8 REALTY, L.L.C., Defendant-Appellee.

No. 107161

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

RELEASED AND JOURNALIZED: October 24, 2019

Paul W. Flowers Co., L.P.A., Paul Flowers, and Louis E. Grube, for appellant.

Frantz Ward, L.L.P., James B. Niehaus, and Kelley J. Barnett, for appellee.

JOURNAL ENTRY AND OPINION

RAYMOND C. HEADEN, J.:

ON RECONSIDERATION¹

{¶1} Plaintiff-appellant Simbo Properties, Inc. ("Simbo") appeals from verdicts finding in favor of defendant-appellee M8 Realty, L.L.C. ("M8") on matters pertaining to a commercial real estate lease agreement between Simbo, the owner and landlord, and M8, the tenant. For the reasons that follow, we affirm.

Procedural and Factual History

{¶2} In December 2012, Simbo and M8 entered into a written lease agreement pursuant to which Simbo leased a commercial real property to M8. The parties negotiated the lease agreement to govern M8's tenancy. The initial term of the lease agreement was for 18 months, ending on June 19, 2014.

{¶3} During M8's tenancy, Simbo claimed that M8 violated several provisions of the written lease agreement resulting in the filing of Simbo's lawsuit. In particular, during M8's tenancy, Simbo claimed M8 caused property damage, including a blockage in the storm sewer and destruction of a flag pole. Simbo also claims M8 did not pay real estate taxes that Simbo claims M8 was required to pay under the lease agreement. Lastly, Simbo further claimed M8 was subject to an automatic renewal term of the lease agreement and was therefore contractually obligated to pay rent from June 2014 through December 2014.

{¶4} Simbo filed a four count complaint against M8 on January 4, 2016, seeking the following: Count 1 — rent (in excess of $150,000); Count 2 — real estate taxes ($32,158.34); Count 3 — property damage (in excess of $30,000 for flag pole and storm sewer); Count 4 — breach of other pertinent lease provisions. M8 filed its answer and counterclaim on February 5, 2016. M8's counterclaim stated M8 provided timely notice to Simbo of its intent not to renew the lease and therefore no rent was owing. M8's counterclaim asserted an alternate claim for relief in the event the trial court found the lease agreement did, in fact, renew. In the alternative, M8 claimed Simbo breached M8's right to quiet enjoyment and constructively evicted M8 from the premises when the commercial property was leased to a new tenant. M8 filed an amended counterclaim on October 20, 2016. The amended counterclaim was identical to the original counterclaim except that paragraph 5 relating to written notice for the automatic renewal was removed from the amended pleading. Discovery proceeded, and motions for summary judgment were filed by both parties. Simbo's motion sought summary judgment on Counts 1 and 3. M8's motion sought judgment on Counts 1 and 4 of Simbo's complaint. On January 24, 2017, the trial court denied Simbo's motion for summary judgment and granted M8's motion for summary judgment on Count 4 only. The matter proceeded to trial on Counts 1, 2, and 3 of Simbo's complaint on July 24, 2017.

{¶5} During trial, M8 was granted a directed verdict on Count 3 alleging that M8 created a storm sewer blockage on the leased premises. A jury heard the remaining issues and rendered a verdict in favor of M8 on Count 1, the outstanding rent due, finding that there was no automatic renewal term. Simbo had sought an award under Count 1 in excess of $150,000. This was the largest dollar amount of damages requested in the lawsuit. A verdict in favor of Simbo was entered on Count 2, real estate taxes, in the amount of $32,158.34. On the remaining issue set forth in Count 3 — the replacement of the flag pole — a verdict was rendered for Simbo in the amount of $5,000. Simbo also prevailed on M8's counterclaim that sought an unspecified amount of damages.

{¶6} On August 31, 2017, Simbo filed a motion for additur and prejudgment interest and a motion for attorney fees and legal expenses. On the same date, M8 filed a motion to amend its counterclaim to conform to the evidence and motion for new trial or remittitur, or for judgment notwithstanding the verdict as well as a motion for attorney fees.

{¶7} Due to a concern about a potential conflict, the trial judge recused herself from the case and the case was transferred to the administrative judge on October 11, 2017, for "good cause shown." On October 16, 2017, the administrative judge held a hearing on the postjudgment motions filed by the parties. The trial court issued its ruling on the postjudgment motions on January 9, 2018. On the issue of the award of attorney fees under the lease agreement, the trial court determined M8 was the "prevailing party" since it won the "main" issue in the lawsuit and, as a result, was entitled to all attorney fees as specified in the lease agreement. M8's motion to amend its counterclaim to conform to the evidence and motion for new trial or remittitur, or for judgment notwithstanding the verdict was denied. The trial court denied Simbo's motion for additur and prejudgment interest and its motion for attorney fees and legal expenses. Simbo filed a motion for reconsideration or clarification or in the alternative, Civ.R. 60(B) relief from judgment. This motion was denied on February 1, 2018.

{¶8} On February 5, 2018, Simbo filed an appeal challenging the trial court's judgment. The appeal was dismissed since the trial court's judgment was not a final appealable order where the issue of attorney fees was not resolved. On remand, Simbo filed a motion for a new trial arguing the original trial judge's recusal precluded postjudgment issues from being fairly adjudicated by the administrative judge. In addition, Simbo filed a brief on the pending issue of legal fees. A hearing was held on February 21, 2018, on the postjudgment issue of legal fees. On April 25, 2018, the trial court denied Simbo's motion for a new trial and awarded M8 attorney fees and expenses in the amount of $238,335.73. Simbo filed the instant appeal.

Law and Analysis

I. Directed Verdict

{¶9} In its first assignment of error, Simbo argues that the trial court erred by granting a directed verdict on Count 3 alleging M8 created a storm sewer blockage. Specifically, Simbo claimed it introduced sufficient evidence that M8's actions caused damage to the commercial property's storm sewer and that the trial court's judgment on this issue of causation was error.

{¶10} "Appellate review of a motion for a directed verdict is de novo." Ridley v. Fed. Express , 8th Dist. Cuyahoga No. 82904, 2004-Ohio-2543, 2004 WL 1119591, ¶ 82. "A directed verdict is appropriate only where the party opposing it has failed to adduce any evidence on the essential elements of his claim."

Cooper v. Grace Baptist Church, Inc., 81 Ohio App.3d 728, 734, 612 N.E.2d 357 (10th Dist.1992). "The question to be determined involves a testing of the legal sufficiency of the evidence to take the case to the jury, and is a question of law, not of fact." Hargrove v. Tanner , 66 Ohio App.3d 693, 695, 586 N.E.2d 141 (9th Dist.1990). "Accordingly, the courts are testing the legal sufficiency of the evidence rather than its weight or the credibility of the witnesses." Snavely Dev. Co. v. Acacia Country Club , 8th Dist. Cuyahoga No. 86475, 2006-Ohio-1563, 2006 WL 826084, ¶ 20.

{¶11} When evaluating a directed verdict on appeal, the reviewing " ‘court must determine whether any evidence exists on every element of each claim or defense for which the party has the burden to go forward.’ " Claris, Ltd. v. Hotel Dev. Servs., L.L.C. , 2018-Ohio-2602, 104 N.E.3d 1076, ¶ 27 (10th Dist.), quoting Eastley v. Volkman , 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 25. "A cause of action for breach of contract requires the claimant to establish the existence of a contract, the failure without legal excuse of the other party to perform when performance is due, and damages or loss resulting from the breach." Lucarell v. Nationwide Mut. Ins. Co. , 152 Ohio St.3d 453, 2018-Ohio-15, 97 N.E.3d 458, ¶ 41. The claimed " ‘damages must be the natural and proximate result of the defendant's breach.’ " Claris, Ltd. at ¶ 28, quoting Mills v. Best W. Springdale , 10th Dist. Franklin No. 08AP-1022, 2009-Ohio-2901, 2009 WL 1710765, ¶ 13.

{¶12} Simbo argues it has established sufficient evidence of proximate cause through owner Mark Sims's lay testimony and this, absent expert testimony, is sufficient to defeat a motion for directed verdict. At trial, Sims detailed a March 2014 incident with a leaky oil tanker and how the subsequent clean-up caused a blockage in the property's storm sewer. He testified that M8 used Oil-Dri pellets to absorb the spilled oil, but M8 failed to clean up the Oil-Dri pellets in a timely manner. Sims observed the Oil-Dri pellets being washed into the storm sewer. The commercial property subsequently flooded in July 2014, which required plumbers to remedy the situation. The plumbers returned in October 2014 for ongoing plumbing issues.

{¶13} Mark Sims claimed the July and October plumbing issues were caused by a storm sewer blockage stemming from the Oil-Dri pellets and their improper disposal by M8 — a violation of the terms of the lease requiring M8 to not cause damage to the leased premises. Simbo sought reimbursement from M8 for the plumbing repairs. No testimony, except Sims's statements, was introduced regarding the storm sewer blockage and how M8's actions caused the blockage. Invoices detailing the plumbing work made no mention of the Oil-Dri pellets or the source of the blockage. The only testimony offered was from Mark Sims. The trial court found that this testimony was insufficient to establish causation. The trial court stated:

[N]obody, including Mr. Sims said the pellets were — there were this many of them or this was taken out, or this plugged this; or nobody talked about how it was that

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