Orum Stair, L.L.C. v. GJJG Ents., L.L.C.
2016 Ohio 7064
| Ohio Ct. App. | 2016Background
- GJJG Enterprises owned a car wash and signed a Listing Agreement with ERA Real Estate First, REALTORS promising a $195 fee plus 7.5% commission on a transaction; Finn and West signed the Listing Agreement.
- Hamel negotiated to buy but failed to close for lack of financing; he instead entered a three-year lease effective November 6, 2011. GJJG did not pay a commission.
- Orum Stair filed a broker’s lien (claiming a $390,000 sale) and sued GJJG, Finn, and others for breach of contract and unjust enrichment, asserting it was entitled to commission.
- The trial court granted summary judgment to Orum Stair for commission on the lease, referred damages to a magistrate (who awarded commission, attorney fees, and expert fees), then the trial court corrected the commission math, awarded fees, vacated the recorded broker’s lien, and denied some fee requests after a standing/capacity issue arose.
- Appeals and a cross-appeal followed; the appellate court affirmed: it held Orum Stair had standing (but had waived lack of capacity defense), affirmed the fee award in part, held Finn (and West) could be personally liable based on the form and signatures, and rendered the lien issue moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / capacity to sue | Orum Stair is successor-in-interest to Real Estate First via merger and thus is the real party in interest entitled to sue. | Listing Agreement was with ERA Real Estate First; Orum Stair lacked standing and also lacked capacity to sue under an unregistered trade name. | Orum Stair had standing (successor entity held assets). Capacity-to-sue defense was waived by defendants; lack of capacity is an affirmative defense. |
| Attorney-fees award | Entitled to contractual fees and all fees incurred to collect the unpaid commission. | Fees for litigating non-merits issues (standing/capacity) are not recoverable; fees should be limited to successful breach claim. | Magistrate’s award of $14,043 (plus $525 expert fee) for fees related to the breach was affirmed; trial court permissibly denied additional fees tied to standing/capacity and denied fees not objected to below. |
| Personal liability of Finn and West | Orum Stair: Finn and West signed agreement personally and are liable. | Finn: they signed as agents for GJJG; liability should rest with GJJG only. | Because signatures lacked corporate designation and the form was ambiguous, Finn and West did not show they avoided personal liability; summary judgment against Finn and West in their individual capacities was affirmed. (Concurring judge dissented on this point.) |
| Broker’s lien (foreclosure) | Lien valid because broker claimed services in connection with a sale. | Lien invalid because purchaser did not close; broker cannot recover more than contract award; lien based on sale was unsupported. | Lien vacated by trial court; appellate court treated cross-assignment as moot because Orum Stair already obtained contractual judgment for the commission amount. |
Key Cases Cited
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (Ohio 2012) (standing / real-party-in-interest principles)
- Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64 (Ohio 1978) (summary judgment standard)
- Aungst v. Creque, 72 Ohio St. 551 (Ohio 1905) (when corporate agent signs without indicating corporate capacity, agent may be personally liable)
- Bittner v. Tri-County Toyota, Inc., 58 Ohio St.3d 143 (Ohio 1991) (trial court discretion in awarding attorney fees and apportioning fees between recoverable and nonrecoverable claims)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (fee awards should exclude time spent on unsuccessful claims that are distinct from successful ones)