Whitt Sturtevant, LLP v. NC Plaza LLC
| Decision Date | 29 September 2015 |
| Docket Number | No. 14AP–919.,14AP–919. |
| Citation | 43 N.E.3d 19 |
| Parties | WHITT STURTEVANT, LLP, Plaintiff–Appellee/Cross–Appellant, v. NC PLAZA LLC et al., Defendants–Appellants/Cross–Appellees. |
| Court | Ohio Court of Appeals |
Lape Mansfield Nakasian & Gibson, LLC, and Douglas M. Mansfield, Powell, for appellee/cross-appellant.
Roetzel & Andress, LPA, Stephen D. Jones, Columbus, Michael R. Traven, and Jeremy S. Young, Columbus, for appellants/cross-appellees.
SADLER
, J.
{¶ 1} Defendants-appellants, NC Plaza LLC (“NC Plaza”) and Arthur Goldner & Associates, appeal from a judgment of the Franklin County Court of Common Pleas in favor of plaintiff-appellee, Whitt Sturtevant, LLP (“Whitt Sturtevant”). For the reasons that follow, we affirm in part and reverse in part.
{¶ 2} In January 2012, attorneys Mark Whitt and Albert Sturtevant began looking for office space in Columbus, Ohio for their newly formed law firm, Whitt Sturtevant. Whitt was the managing partner for Whitt Sturtevant in Columbus, Ohio.1 Whitt engaged the services of a real estate broker by the name of Melissa Ramsier to help Whitt Sturtevant find space in Columbus and negotiate terms. Whitt and Ramsier entered into negotiations with Mathew Gregory of NAI Ohio Equities, the broker who had the exclusive listing agreement with NC Plaza.
{¶ 3} As a result of the negotiations, Whitt Sturtevant and NC Plaza executed an occupancy agreement whereby Whitt Sturtevant commenced occupancy of suite 2110 in the NC Plaza building on a temporary basis beginning January 26, 2012. Whitt Sturtevant was to continue to occupy suite 2110, rent free, until such time as the renovations on suite 2020 could be completed. The occupancy agreement provides, in relevant part, as follows:
Landlord shall permit Tenant to occupy 155 E. Broad Street, Suite 2110 (the “Temporary Premises”) as of Monday, January 30, 2012. Tenant shall be permitted to occupy the Temporary Premises at no charge during lease negotiations and until substantial completion of the Tenant Improvements to the Premises.
(Emphasis sic.) (Occupancy Agreement, 1.)
{¶ 4} The parties continued to negotiate terms of a lease agreement through the end of February 2012. Whitt ultimately signed the written lease agreement on behalf of Whitt Sturtevant on March 14, 2012. Arthur Goldner, president of Arthur Goldner & Associates, signed the lease on behalf of the owner, NC Plaza, on March 16, 2012. The lease term was five years and three months commencing on the date of substantial completion in suite 2020, which the parties estimated at 90 days after lease execution. Under the lease terms, the first three months rent were free.2
{¶ 5} The lease contains a “temporary occupancy” provision for suite 2110 that is nearly identical to the analogous provision in the occupancy agreement. The lease also contains the following relevant provisions:
(Lease Agreement, 4.)
{¶ 6} Exhibit D to the lease agreement entitled “Landlord's Work” reads, in relevant part, as follows:
{¶ 7} The parties expressly agreed at paragraph (e) that the landlord's contribution to construction costs would be $49,750. Attached as an exhibit to the lease is a one-page floor plan for suite 2020. Rick Aronhalt, Goldner's building manager, solicited bids from several contractors for the renovation work. Whitt testified on cross-examination that the bids were predicated on the one-page floor plan for suite 2020 that was attached to NC Plaza's proposal for a lease agreement. In the margins of the floor plan is a list of the items to be completed as part of the project. Roslovic Construction was the low bidder with a bid of $40,800. NC Plaza subsequently hired Frank Weaver of WSA Studio (“WSA”) to draft plans and specifications for the renovation project. Whitt Sturtevant was not a party to the agreement between NC Plaza and WSA.
{¶ 8} With the input of Whitt, Holly Potter, Whitt Sturtevant's office manager, and an interior decorator hired by Whitt Sturtevant, WSA drafted plans and specifications for the renovation project. On or about April 27, 2012, WSA completed the plans and specifications, and they were submitted to the city of Columbus for approval and permitting. On May 22, 2012, Roslovic provided Aronhalt with revised pricing for the project of $63,700. Whitt testified that Aronhalt did not inform him of this new pricing information. On May 22, 2012, Roslovic entered into a contract with NC Plaza for the renovations. Whitt Sturtevant was not a party to this agreement.
{¶ 9} Construction in suite 2020 began on June 12, 2012. On July 23, 2012, Aronhalt sent a letter to Whitt accusing Whitt Sturtevant of making significant changes to the approved plans “without [his] knowledge” which have caused “significant delays in the delivery of your permanent space.” (Plaintiff's exhibit No. 20.) The letter demanded that Whitt Sturtevant commence paying monthly rent beginning August 1, 2012. On July 25, 2012, Whitt responded by denying that Whitt Sturtevant was responsible for delays in the project and asserting that Whitt Sturtevant was not yet obligated to pay rent.
{¶ 10} On July 26, 2012, Whitt, Potter, Aronhalt, and Roslovic met to discuss the progress of the renovation project. The parties also discussed a commencement date at the meeting notwithstanding the lack of progress on the renovations. According to Whitt, he expressed willingness on the part of Whitt Sturtevant to compromise on the 90–day rent-free period once substantial completion was achieved, but he was not willing to agree to a commencement date at that time given the lack of progress on the renovations.
{¶ 11} In August 2012, Gregory contacted Goldner with his concerns that the project was not moving forward. At trial, Gregory acknowledged that he believed Aronhalt was sitting around waiting for Whitt Sturtevant to proceed with the project. Gregory also acknowledged that he asked Goldner to “give [Aronhalt] a little nudge to make sure he's taking control of the project.” (Tr. 867.)
{¶ 12} On or about August 6, 2012, Whitt received Roslovic's “proposal” for a change order which had been forwarded to him by Aronhalt. According to Whitt, this was the first time since he signed the lease that he had received any pricing information from Aronhalt. Roslovic's proposed invoice for the project totaled $127,859, more than double the landlord's allowance of $49,750. Whitt responded by informing Aronhalt that Roslovic's proposal included charges for such things as granite countertops and architectural wall panels that Whitt Sturtevant had already purchased for incorporation into the project. Whitt also expressed concerns that the invoice from Roslovic contained little in the way of detail. For example, a line item on the invoice of $64,109 is identified only as “Total Cost of Change.” (Defendant's exhibit No. 20–12.) Whitt also suspected that Whitt Sturtevant was being charged for work in the lobby which was not Whitt Sturtevant's responsibility under the lease agreement, as well as other work that should have been included in the cost of the original estimate.
{¶ 13} Roslovic provided Aronhalt with a revised proposal of $96,316 on or about August 24, 2012. When Aronhalt forwarded this pricing information to Whitt Sturtevant, Whitt remained unsatisfied with the lack of detail in the proposal. He was unable to determine from the information in the proposal whether Whitt Sturtevant was being asked to pay for items that were either included in the cost of the original plans and specifications and were to be paid for by the landlord or were costs resulting from errors and/or omissions of the architect and the contractor. Whitt testified that Whitt Sturtevant was willing to pay for only those additional costs that were attributable to extra work requested by Whitt Sturtevant.
{¶ 14} On or about September 24, 2012, Aronhalt delivered an “Invoice” to Whitt Sturtevant representing the anticipated cost of the renovation project, including changes to the work allegedly requested by Whitt Sturtevant at the July 26, 2012 meeting. The invoice, dated September 20, 2012, specifies a total project cost of $114,547. A line item identified as “Tenant Requested Redesign” indicates a charge of $32,566. (Defendants' exhibit No. 19–00, Plaintiff's exhibit No. 35.) Deducting the landlord's construction allowance of $49,750, the...
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