Ashtabula Cnty. Airport Auth. v. Rich
103 N.E.3d 51
| Ohio Ct. App. | 2017Background
- Rich leased a portion of an aircraft hangar from Ashtabula County Airport Authority (Authority) under a written 2013 lease containing an indemnification clause requiring lessee to pay attorney’s fees for breaches or claims arising from use/occupancy.
- Authority notified Rich on August 13, 2013 that his tenancy would terminate September 30, 2013 for discontinuing electric service and using a portable generator; Rich removed the generator but kept his plane in the hangar and paid no rent from October 2013 through December 2014.
- Rich filed suit (2013 CV 756) in October 2013 asserting contract and related claims; defendants answered and ultimately obtained judgment dismissing Rich’s claims in December 2014.
- Authority filed the present suit in February 2015 seeking unpaid rent (Oct 2013–Dec 2014) and indemnification for attorney’s fees incurred defending Rich’s 2013 suit; Bowden separately sought attorney’s fees under the same clause.
- Trial court granted partial summary judgment for plaintiffs (Authority and Bowden), awarding unpaid rent and substantial attorney’s fees; Rich appealed arguing compulsory-counterclaim bar and that the indemnity clause is unconscionable/public policy barred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unpaid rent (Oct 2013–Dec 2014) was a compulsory counterclaim | Authority: Most rent became due after the pleadings in 2013 case, so rent claim did not exist then and is not compulsory | Rich: All past-due rent arising from the same lease should have been raised as compulsory counterclaims in his 2013 suit | Court: Rent after October 2013 was not a compulsory counterclaim because those amounts did not exist at time of the prior pleadings; trial court correctly considered rent claim here |
| Whether indemnification claim for attorney’s fees (fees incurred defending 2013 suit) was a compulsory counterclaim | Authority/Bowden: Fees arose after or during litigation and could be asserted separately | Rich: Fees were logically related to the 2013 litigation and thus compulsory; failure to raise them there bars later suit | Court: Attorney-fee/indemnity claim was a compulsory counterclaim related to the 2013 action; award of those fees is reversed and remanded (fees may be awarded only for work on the properly-filed rent claim) |
| Whether indemnification clause (attorney’s fees) is unconscionable or against public policy | Authority/Bowden: Clause is bargained-for, commercial, and applies to fees for collecting rent or defending lease-related claims | Rich: Clause forces him to pay fees whenever litigation is brought, regardless of outcome; unconscionable and public-policy barred | Court: Clause is enforceable and not unconscionable or against public policy as applied to rent-collection and lease-breach matters; procedural and substantive unconscionability not shown |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 671 N.E.2d 241 (Ohio 1996) (summary-judgment de novo standard and principles)
- Geauga Truck & Implement Co. v. Juskiewicz, 9 Ohio St.3d 12, 457 N.E.2d 827 (Ohio 1984) (compulsory counterclaim must exist at time of serving the pleading)
- Rettig Enters., Inc. v. Koehler, 68 Ohio St.3d 274, 626 N.E.2d 99 (Ohio 1994) (logical-relation test for compulsory counterclaims to avoid duplicative litigation)
- Lake Ridge Academy v. Carney, 66 Ohio St.3d 376, 613 N.E.2d 183 (Ohio 1993) (definition and elements of unconscionability)