2021 Ohio 1063
Ohio Ct. App.2021Background
- Landlord Anthony and Frank Wroblesky leased commercial premises to tenants Renza Hughley, Jr. and Tom Dyson beginning December 1, 2017; rent was $1,750 monthly plus taxes and insurance due on the first of each month.
- The lease authorized use “exclusively as a restaurant and bar” and required the tenant to procure any licenses and permits necessary for the tenant’s use.
- The lease contains a force majeure clause that expressly excludes the tenant’s obligation to pay rent and other charges from being excused by governmental restrictions or other causes beyond control.
- Tenants paid December 2017 rent and some later payments but defaulted; landlords sued for breach of lease and sought damages for unpaid rent, taxes, and insurance.
- Tenants defended that issuance of an Ohio liquor permit was a condition precedent to enforcement and asserted defenses of frustration of purpose and impracticability due to government action; trial court granted summary judgment to landlords for $24,709.86; tenants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Condition precedent | Lease contains no condition — rent due during the lease term and tenant must obtain permits | Enforcement should be conditioned on issuance of liquor permit | No condition precedent: lease language shows rent obligations began Dec. 1, 2017 and contained no permit-contingent payment clause. |
| Frustration of purpose | Doctrine not applicable; lease allows restaurant use without liquor and force majeure carves out rent | Lack of liquor permit defeated the lease’s principal purpose (operating a bar) | Court declined to adopt frustration doctrine here; even if available, tenants failed to show total frustration, the lease contemplated restaurant/bar use, and risk of permit delay was allocated to tenant. |
| Impracticability due to government action | Parties allocated risk of permit delay to tenant via lease and force majeure carve-out | Government delay in issuing permit made performance impracticable | Impracticability defense fails: court held government interference did not excuse payment because lease placed the risk on the tenant. |
Key Cases Cited
- Mumaw v. W. & S. Life Ins. Co., 97 Ohio St. 1, 119 N.E. 132 (Ohio 1917) (defines condition precedent and clarifies intent is determined from the entire contract)
- Dresher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264 (Ohio 1996) (summary judgment movant’s initial burden to point to evidentiary material)
- Mitseff v. Wheeler, 38 Ohio St.3d 112, 526 N.E.2d 789 (Ohio 1988) (nonmoving party’s burden under summary judgment rules)
- Security Sewage Equip. Co. v. McFerren, 14 Ohio St.2d 251, 237 N.E.2d 898 (Ohio 1968) (risk of obtaining governmental license rests with party contracting to render performance requiring such license)
- Chef Italiano Corp. v. Kent State Univ., 44 Ohio St.3d 86, 541 N.E.2d 64 (Ohio 1989) (final-judgment and appealability principles)
