The Deli Table, Inc. v. Great Lakes Mall
| Decision Date | 31 December 1996 |
| Docket Number | 96-LW-5648,95-L-012 |
| Parties | THE DELI TABLE, INC., et al., Plaintiffs-Appellants/Cross-Appellees, v. GREAT LAKES MALL, et al., Defendant-Appellee/Cross-Appellant. CASE |
| Court | United States Court of Appeals (Ohio) |
Civil Appeal from Court of Common Pleas Case No. 93 CV 001723
HON DONALD R. FORD, P.J., HON. JUDITH A. CHRISTLEY, J., HON JOSEPH E. MAHONEY, J.
ATTY. LAURENCE R. SNYDER, SNYDER ASSOCIATES, One Erieview Plaza, #450, Cleveland, OH 44114, (For Plaintiffs-Appellants/Cross-Appellees)
ATTY. BARBARA F. YAKSIC, 2300 BP America Building, 200 Public Square, Cleveland, OH 44114, (For Defendant-Appellee/ Cross-Appellant)
The instant case involves both an appeal and a cross-appeal from a final judgment of the Lake County Court of Common Pleas. In the appeal, William H. Spero and the Deli Table, Inc., appellants/cross-appellees, seek the reversal of the court's decision to enter judgment against them as to four of the eleven claims in their amended complaint. In addition, they seek the reversal of the court's decision to dismiss certain claims and parties from the action. In the cross-appeal, the Great Lakes Mall, Inc., appellee/cross-appellant, seeks the reversal of the court's decision to enter judgment against it for the sum of $6,440, on the basis that it had improperly disposed of certain collateral.(fn1)
The Great Lakes Mall ("Mall") is a wholly-owned subsidiary of the Edward J. DeBartolo Corporation. In the late 1980's, the Mall underwent extensive renovation. As part of this process, a food court was added to the Mall.
In early February 1989, Spero contacted the current manager of the Mall, seeking information concerning the possibility of opening a delicatessen in the food court. The manager referred Spero to Arthur Stevens, who was the regional leasing manager for the DeBartolo Corporation.
During their initial conversation, Stevens indicated that the DeBartolo Corporation would probably be interested in leasing a place in the food court for a delicatessen-type restaurant. In response to a specific question from Spero, Stevens stated that the Mall had already executed leases with certain businesses which planned to open restaurants in the food court. Specifically, Stevens indicated that the list of tenants included, inter alia, Joe's Burgerama and Taco A Go-Go.
Immediately after the initial conversation, Stevens mailed Spero a diagram of the layout of the food court. Besides showing the location of the various units in the food court, the diagram indicated which units had already been claimed by those businesses which had executed leases. Consistent with Stevens' statements, the diagram showed that two of the units would be occupied by Joe's Burgerama and Taco A Go-Go.
Over the next few months, Spero and his representatives began to negotiate a lease agreement with representatives of both the Mall and the DeBartolo Corporation. Over this same period, Stevens began to negotiate possible leases with two national fast-food restaurants, Burger King and Taco Bell. Spero was never made aware of these separate negotiations.
Once it became evident that Spero would be able to reach an agreement with the Mall, the proposed business was incorporated under the laws of this state and given the name "Deli Table, Inc." Spero was the sole shareholder in the corporation.
As one of its first acts following its incorporation, the Deli Table executed a five-year lease with the Mall. Although he was not an actual party to the lease agreement, Spero signed the agreement in behalf of the corporation as its president. Under the lease agreement, the Mall was the sole landlord; the DeBartolo Corporation was not a party to the lease.
Attached to the lease agreement was another diagram of the food court. Unlike the original diagram which Stevens had originally given to Spero, this diagram did not list the names of the other tenants in the court.
As part of the lease transaction, Spero also executed a "Surety of Lease" contract. Unlike the lease agreement, Spero signed the surety contract in his individual capacity. Under this contract, Spero agreed to, inter alia, stand personally liable to the Mall for any payments which the Deli Table might owe under the lease agreement.
The lease agreement provided that the lease was to commence on October 1, 1989. However, Spero did not submit the architectural plans for approval by the Mall until mid-September 1989. Because certain changes to the original plans had to be made in order to comply with all of the Mall's requirements, final approval of the plans was not given until mid-October 1989.
The first contractor which Spero scheduled to work on the restaurant was the W. F. Hann Company, which was hired to install the plumbing, the electrical system, and the heating and air conditioning systems. Almost immediately after their arrival at the construction site on the first day, employees of W. F. Hann were told by certain Mall representatives that they would not be allowed to work at the site because they were non-union workers. In addition, the Mall's maintenance manager informed Spero that any work on the restaurant could only be performed by union workers. As a result, construction on the restaurant was delayed until Spero could hire a new contractor to perform the work which W. F. Hann had been scheduled to do.
Although some of the restaurants in the food court opened in mid-November 1989, the Deli Table did not open until January 20, 1990. On approximately that same date, both a Burger King and a Taco Bell opened in the court. The two restaurants to which the original diagram had referred, Joe's Burgerama and Taco A Go-Go, never opened because the parent company of both of the latter restaurants went bankrupt.
Almost immediately after its opening, the Deli Table began to experience financial difficulties, due in part to a lack of business. As a result, Spero asked Stevens to assist him in possibly finding a buyer for the business. While Stevens initially stated that he would try, a buyer was never found.
In addition, a dispute soon arose between the Deli Table and the Mall concerning the payment of the required rent. Although the Mall was unable to have the Deli Table evicted from the premises, it did subsequently obtain two judgments against Spero and the Deli Table for unpaid rent.
The Deli Table went out-of-business in May 1992. In vacating the leased premises, Spero and the Deli Table left certain inventory and equipment which had been used in the business. These materials were encumbered under two separate security interests. One of these interests was held by Bank One, which had loaned the Deli Table money at the inception of the business. The other security interest was held by the Mall through a provision in the lease.
Because the Deli Table was in default on its loan, Bank One decided to foreclose on its interest in the inventory and equipment. Accordingly, a few months after the business had closed, Bank One contacted the Mall to inquire whether a public auction could be held on the leased premises. When the Mall refused to allow such a proceeding to take place, Bank One made plans to remove the materials from the leased premises and hold a private auction. However, when Bank One subsequently inquired about the materials, the Mall informed Bank One that the materials had been removed and that it did not know what had been happened to them.
In November 1993, Spero and the Deli Table initiated the instant action against the Mall, the DeBartolo Corporation, Stevens, Daniel Bodden, the Palm Beach Mall, and John Doe.(fn2) The original complaint in the action was signed by Spero pro se; however, Spero and the Deli Table subsequently filed an amended complaint which was signed by an attorney. In the amended complaint, Spero and the Deli Table asserted eleven causes of action against all of the defendants.
Under each cause of action, Spero and the Deli Table alleged that the defendants had conspired to commit certain acts against them. Specifically, they alleged that: (1) the defendants had maliciously filed lawsuits against Spero and the Deli Table; (2) the defendants had violated the covenant of quiet possession of the leased premises; (3) the defendants had improperly refused to allow the employees of the W. F. Hann Company to perform work on the premises; (4) the defendants had failed to provide security of the premises during construction; (5) the defendants had "converted" some of the equipment and materials which had been added as improvements to the premises; (6) the defendants had failed to help Spero in selling the business; (7) the defendants had failed to provide food trays to the Deli Table; (8) the defendants had violated provisions of the Uniform Commercial Code; (9) the defendants had violated provisions of the Ohio Revised Code by engaging in unfair and deceptive acts; (10) the defendants had made fraudulent misrepresentations to Spero during the negotiation of the lease agreement, concerning who the other tenants in the food court would be; and (11) the defendants had breached their duty of good faith and had tortiously interfered with a contract.
After answering the amended complaint, three of the defendants Stevens, Bodden, and the Palm Beach Mall, moved the trial court to dismiss the entire amended complaint as to them. Although these three defendants ultimately presented arguments in relation to specific causes of action, they essentially raised two arguments for consideration. First, they argued that they were not proper parties to the action because they had not been parties to the lease agreement. Second, they asserted that, as employees or a subsidiary of the DeBartolo Corporation, the...
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