Investor Support Serv., L.L.C. v. Dawoud
2021 Ohio 2293
| Ohio Ct. App. | 2021Background
- Investor Support Services, LLC ("Equity Team") managed a Mason, Ohio single-family rental under a property management agreement (PMA) with owner Dr. Dalia Zaky Dawoud.
- Equity Team sued Dawoud for $2,831.40 (leasing fees, management charges, labor, off-boarding) and sought attorney fees under the PMA; Dawoud counterclaimed for breaches, fiduciary violations, unjust enrichment, and unauthorized practice of law.
- Bench trial before a magistrate produced conflicting testimony from Equity Team's CEO and Dawoud.
- Magistrate found Dawoud owed $473.40 in past-due management fees (which Dawoud conceded) but denied a leasing fee because Equity Team failed to procure a tenant "ready, willing, and able" to lease on Dawoud’s terms.
- Magistrate denied attorney fees to both parties as unjust, citing the disproportionate litigation costs in small-claims court and the parties’ decision to "lawyer up."
- Trial court overruled Equity Team’s objections and affirmed; Equity Team appealed raising two assignments of error (attorney fees and leasing fee entitlement).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Equity Team is entitled to recover attorney fees under the PMA's fee-shifting clause | PMA mandates the non-prevailing party pay fees; Equity Team prevailed on main issues and obtained a monetary judgment, so it is the prevailing party | No single party prevailed; both incurred disproportionate fees in small-claims litigation and justice requires each bear own fees | Court: Neither party was the prevailing party; denial of fees affirmed (de novo review) |
| Whether Equity Team is entitled to a leasing fee under Section 4g (procure a "ready, willing, and able" tenant) | Equity Team substantially performed by procuring a tenant who expressed interest; thus leasing fee is due | The procured tenant (J.B.) never agreed to lease on terms acceptable to Dawoud, so tenant was not "ready, willing, and able" on owner’s terms | Court: Finding was a factual one; manifest-weight review affirms that Equity Team failed to procure a tenant ready, willing, and able on Dawoud’s terms; leasing fee denied |
Key Cases Cited
- Wilborn v. Bank One Corp., 121 Ohio St.3d 546 (2009) (contracts and statutes can create fee-shifting exceptions to the American Rule)
- Nottingdale Homeowners' Assn., Inc. v. Darby, 33 Ohio St.3d 32 (1987) (contractual attorney-fee provisions may be enforceable)
- Bauman v. Worley, 166 Ohio St. 471 (1957) (broker not entitled to commission if buyer not ready, willing, and able on owner’s terms)
- Eastley v. Volkman, 132 Ohio St.3d 328 (2012) (manifest-weight standard of review articulated)
- Ferguson Relators v. Butts, 37 Ohio App.3d 30 (1987) (distinguishes a buyer/lessee with mere interest from one ready, willing, and able)
- State ex rel. Reyna v. Natalucci-Persichetti, 83 Ohio St.3d 194 (1998) (no prevailing party where neither party entirely prevails)