Schlenker Ents., L.P. v. Reese
2010 Ohio 5308
Ohio Ct. App.2010Background
- Schlenker Enterprises, LP owned the real estate and leased to Stubbs, who operated a Dairy Queen business under a lease and an assignment.
- Stubbs began missing rent in 1999; Schlenker continued to accept partial payments while tallying back rent but did not sue immediately for past due rent.
- In 2006, Schlenker sold the real estate to IDC Ohio Holdings, LLC and assigned the lease to IDC; IDC then sold the property to Timberline River Ranch and the Picketts.
- Stubbs alleged that the IDC/Slacks transaction involved a pattern of corrupt activity and that Schlenker’s sale and payment arrangements improperly affected Stubbs’ interests.
- The trial court granted summary judgment for Schlenker on past due rent; Civ.R. 12(B)(6) dismissals followed for OCPA claims against Schlenker, IDC, and Slacks, with later amendments.
- The appellate court affirmed in part, reversed in part, and remanded, sustaining the Civ.R. 12(B)(6) dismissals as non-merits-based, and holding some issues to be procedural rather than substantive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of rent collection right | Schlenker waived its right to sue Stubbs directly for past due rent through the IDC/Schlenker sale arrangement. | No waiver occurred; the agreement with IDC was an alternative payment plan tied to a failed sale, not a waiver. | No waiver; summary judgment for Schlenker on past rent upheld. |
| Civ.R. 12(B)(6) dismissal of OCPA claims against Schlenker | Stubbs sufficiently alleged a pattern of corrupt activity and related injury against Schlenker. | Stubbs failed to allege all elements of the OCPA, particularly the required causal injury and specific conduct. | Affirmed; dismissal upheld for failure to state a claim under OCPA. |
| Civ.R. 12(B)(6) dismissal of OCPA claims against IDC and Slacks | IDC/Slacks engaged in a pattern of corrupt activity injuring investors; Stubbs was injured by that pattern. | Stubbs lacked standing and failed to plead injury or direct involvement in a cognizable OCPA claim. | Dismissals affirmed; lacked standing and failed to plead injury; claims dismissed. |
| Classification of Civ.R. 12(B)(6) dismissals as with or without prejudice | Dismissals should be without prejudice because they were procedural; not merits-based. | Dismissals were merits-based under the record. | Sustained; the dismissals were without prejudice for Schlenker and IDC/Slacks, reflecting procedural grounds. |
| Conspiracy claim under R.C. 2923.01(A)(1) | Stubbs alleged Schlenker conspired with IDC to engage in pattern-of-corrupt-activity. | No adequately pled conspiracy claim; pleadings did not properly allege conspiratorial conduct. | Rejected; conspiracy claim not adequately alleged and thus not considered. |
Key Cases Cited
- Border City Sav. & Loan Ass'n v. Moan, 15 Ohio St.3d 65 (1984) (pleading standards; Civ.R. 8 notice and sufficiency of complaint)
- LeRoy v. Allen, Yurasek, & Merklin, 114 Ohio St.3d 323 (2007) (Civ.R. 12(B)(6) standards; pleading sufficiency; fair notice)
- Fancher v. Fancher, 8 Ohio App.3d 79 (1982) (pleading requirements; direct allegations on material points)
- Maverick Oil & Gas, Inc. v. Barberton City School Dist. Bd. of Edn., 171 Ohio App.3d 605 (2007) (failure to plead all theories; waiver of remedies)
- Keenan v. Adecco Employment Services, Inc., 2006-Ohio-3633 (2006) (principles governing Civ.R. 8 notice and dismissal standards)