Cleveland Town Ctr., L.L.C. v. Fin. Exchange Co. of Ohio, Inc.
2017 Ohio 384
| Ohio Ct. App. | 2017Background
- FECO leased retail space from CTC since 1992; lease included an exclusivity clause barring other tenants from offering check cashing, precious metals purchase, tax preparation/e-filing, and related services.
- In 2011 FECO notified CTC of violations (check cashing and tax services) and, pursuant to the lease, elected to pay reduced rent of $800/month; CTC accepted reduced payments from Nov 2011 through Aug 2014.
- In July 2014 FECO notified CTC of a new violation: an adjacent tenant buying/selling precious metals, and elected to terminate the lease effective Aug 31, 2014.
- CTC sued for breach, claiming FECO still owed full rent and breached by stopping payments; FECO counterclaimed for declaratory relief and sought attorney fees under the lease.
- Trial court granted summary judgment to FECO, concluding the 2014 incident was a new exclusivity breach permitting termination; the court awarded FECO attorney fees and costs but declined to award fees and expert costs incurred preparing for the fee hearing.
- Both sides appealed: CTC challenged the summary-judgment ruling; FECO challenged the denial of pre-hearing attorney and expert-fee awards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FECO proved a new exclusivity violation in 2014 so as to elect termination | CTC: 2014 incident was not a new violation but continuation of the 2011 issue; FECO lacked sufficient evidence (photograph) to prove a new violation | FECO: 2014 letter and attached photograph documented a distinct, new violation (precious metals) triggering the termination remedy in the lease | Court: AFFIRMED summary judgment for FECO — record (affidavit, letters, photo) showed a new violation and CTC produced no contrary evidence; CTC waived objections to the photo by not raising them below |
| Whether FECO was entitled to contractual attorney fees and costs | CTC: FECO breached lease and is not entitled to fees | FECO: Prevailing party per lease §22, entitled to reasonable attorney fees and costs | Court: Awarded FECO $16,170.86 in attorney fees and costs as prevailing party under the lease |
| Whether FECO could recover expert witness fees for fee hearing | FECO: Expert fees were reasonably incurred to prove fee reasonableness | CTC: Objected to none at hearing; argued lease allows attorney fees and costs only | Court: DENIED expert fees — lease authorizes attorney fees and court costs only; trial court could assess reasonableness without expert testimony |
| Whether FECO could recover attorney fees incurred preparing for/attending the fee hearing | FECO: Pre-hearing preparation and attendance fees are compensable | CTC: Those additional fees were unnecessary/avoidable and not required by the lease | Court: DENIED additional pre-hearing attorney fees — trial court did not abuse discretion; cited distinction from statutory-fee cases and FECO could have presented a contemporaneous accounting at the hearing |
Key Cases Cited
- Zivich v. Mentor Soccer Club, 82 Ohio St.3d 367 (Ohio 1998) (summary-judgment standard)
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (Ohio 1977) (summary-judgment standard)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (Ohio 1996) (de novo review on appeal of summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (movant’s and nonmovant’s burdens on summary judgment)
- Huffman v. Hair Surgeon, Inc., 19 Ohio St.3d 83 (Ohio 1985) (abuse-of-discretion standard)
- Turner v. Progressive Corp., 140 Ohio App.3d 112 (Ohio Ct. App. 2000) (distinguishing contractual fee awards from statutory fee regimes)
- Gagne v. Maher, 594 F.2d 336 (2d Cir. 1979) (policy rationale for awarding fees under statutory fee-shifting provisions)