CHKRS, LLC v. City of Dublin, 2:18-cv-01366

Background:

In July 2015 CHKRS, LLC leased residential property from Karen Friedman under a three‑year lease containing Paragraph 31: any monies from Dublin/ODOT are payable to Friedman "until the Lessee has procured on the purchase option."
Shortly after the lease, the City of Dublin initiated eminent‑domain proceedings for an easement for a bike path and deposited $25,080 into escrow for compensation to the fee owner.
CHKRS disputed the disbursement in Ohio courts, arguing it had an interest; state trial and appellate courts found CHKRS had not "procured" the purchase option in 2016 and that the lease precluded tenant recovery.
CHKRS exercised its purchase option and bought the property in July 2018, then filed this federal suit alleging Fifth Amendment taking and due‑process claims; earlier dismissals on pleadings were partially reversed by the Sixth Circuit (takings claim not frivolous) and remanded.
On remand the district court denied defendant’s motion to strike CHKRS’s managing member’s affidavit as irrelevant, then granted summary judgment for defendants, holding CHKRS had no compensable interest at the time of the alleged takings.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Compensable interest: Did CHKRS have a compensable property interest at the time of the alleged takings (2015–2016)?	CHKRS contends the lease and its purchase option gave it an equitable/compensable interest and that it later "regained" the right when it purchased in 2018.	Defendants argue the relevant time is when the taking occurred and Paragraph 31 unambiguously assigns eminent‑domain monies to the owner (Friedman) until the lessee procures the option, so CHKRS had no compensable interest in 2015–2016.	Court: Held for defendants — under Ohio law the compensable interest is judged at the time of the taking and the unambiguous lease provision deprived CHKRS of any compensable interest then.
Timing: Should compensability be assessed at the time of taking or at CHKRS’s later purchase?	CHKRS urges assessment at the 2018 purchase date when it became fee owner.	Defendants say assessment is at the time of the taking (2015–2016).	Court: Assess compensability at time of taking; subsequent purchase does not retroactively confer a right to compensation.
Equitable ownership/equitable conversion: Can CHKRS recover via equitable doctrines despite the lease term?	CHKRS invokes equitable ownership/equitable conversion doctrines (citing Cullen) to claim an equitable stake and entitlement to compensation.	Defendants and court note equitable doctrines are narrow; parties’ clear contractual allocation controls and state appellate precedent rejected CHKRS’s equitable‑ownership argument.	Court: Declined to apply equitable conversion to override explicit lease terms; equitable ownership did not create a compensable interest.
Motion to strike affidavit: Should Robert Smith’s affidavit be stricken from the record?	CHKRS submitted the Smith affidavit to contradict defendants’ factual claim about consent to 2016 construction.	Defendants argued the affidavit was procedurally improper and contained false claims; sought its removal.	Court: Denied the motion to strike as the affidavit, while largely irrelevant to the dispositive legal issue, is not abusive and may remain in the public record.

Key Cases Cited

City of Dublin v. Friedman, 101 N.E.3d 1137 (Ohio Ct. App. 2017) (state appellate decision interpreting lease to bar tenant compensation)
Steinle v. Cincinnati, 53 N.E.2d 800 (Ohio 1944) (compensation belongs to those with property interest when taking occurs)
Hatfield v. Wray, 748 N.E.2d 612 (Ohio Ct. App. 2000) (right to damages is assessed at time of taking)
City of Cincinnati v. Spangenberg, 300 N.E.2d 457 (Ohio Ct. App. 1973) (lessee generally may recover, but parties may contractually alter rights)
Cullen & Vaughn Co. v. Bender Co., 170 N.E. 633 (Ohio 1930) (equitable conversion doctrine applied historically to tenant who later purchased)
Inland Refuse Transfer Co. v. Browning–Ferris Indus., Inc., 474 N.E.2d 271 (Ohio 1984) (contract interpretation—clear and unambiguous terms control)
Bd. of Regents v. Roth, 408 U.S. 564 (U.S. 1972) (state law defines compensable property interests)
Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden shifting)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standard—evidence and inferences for nonmovant)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (definition of "genuine" dispute for summary judgment)