Cobblestone Square II Co., Ltd. v. L&B Food Servs., Inc.
2011 Ohio 4817
Ohio Ct. App.2011Background
- Cobblestone leased retail space to L&B in 1999; Keatings personally guaranteed the lease.
- Exclusivity clause prohibited non-primary sub-type sandwich sales; Bellacino's offered grinders, raising a potential breach issue.
- Bellacino's presence prompted 2000 and 2003 breach inquiries; Cobblestone initially deemed Bellacino's not primarily grinders.
- September 2005 amendment added a one-time termination option for L&B if several performance conditions were met (Section 4.C.).
- 2006 action: L&B attempted to invoke Section 4.C. but did not vacate; Cobblestone amended rent/default discussions continued.
- 2008 judgment: Cobblestone awarded two months’ rent; the court found L&B failed to prove damages and that mitigation was proper; Cobblestone cross-appealed on mitigation timing/amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did landlord violate exclusivity by allowing Bellacino’s to operate? | L&B/Keatings: Bellacino’s primary product violated exclusivity. | Cobblestone: primary-use definition is ambiguous; no proven breach. | No reversible error; damages not proven; exclusivity not proven. |
| Did L&B/Keatings fail to prove damages with reasonable certainty? | Lost profits and cannibalization should be recoverable. | Damages speculative; failed to separate market factors; no proven lost profits. | Damages not proven with reasonable certainty; assignment of error overruled. |
| Was the denial of a continuance for trial an abuse of discretion? | L&B/Keatings lacked notice; requested continuance due to counsel/witness. | Court acted within discretion; no prejudicial error. | No abuse; denial affirmed. |
| Did Cobblestone properly mitigate damages and cap damages to two months’ rent? | Mitigation failed; other company willing to lease; longer damages possible. | Mitigation supported; two months’ rent reasonable; no full-term damages. | Mitigation proper; two months’ rent awarded; cross-appeal rejected. |
Key Cases Cited
- U.S. Bank Natl. Assn. v. Gullotta, 120 Ohio St.3d 399 (Ohio 2008) (damages and mitigation limitations in breach scenarios)
- Gahanna v. Eastgate Properties, Inc., 36 Ohio St.3d 65 (Ohio 1988) (lost profits must be proven with reasonable certainty)
- Ohio Valley Radiology Assoc., Inc. v. Ohio Valley Hosp. Assn., 28 Ohio St.3d 118 (Ohio 1986) (due-process notice and trial scheduling principles)
- Seasons Coal Co. v. Cleveland, Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77 (Ohio 1984) (credibility and deference to trial court findings)