454 N.E.2d 1367 | Ohio Ct. App. | 1982
This is an appeal from a decision by the Lyndhurst Municipal Court awarding plaintiff-appellant Gary R. Berlinger $20 against defendants-appellees Suburban Apartment Management Co. and Mentor Lagoons, Inc. (hereinafter referred to collectively as the "landlord" or as "appellee").
Appellant was a tenant in an apartment building owned by the appellee. He had given his landlord a security deposit of $420. The lease between the parties provided in capital letters that appellant would not bring a motorcycle on the premises.1 In a separate document entitled "Disposition Advice,"2 appellant signed his name under a separate paragraph which states:
"I agree that if I bring a pet, truck, motorcycle or van onto the property I will be charged by management and pay to it the sum of $50.00 each time."
When the appellant moved out at the end of October 1980, he did not pay his last month's rent of $210. He sent his landlord his forwarding address, and the appellee returned to him a notice charging him for his last month's rent and an additional $300 for having kept a motorcycle on the premises. The appellee did not return any portion of the security deposit, for the charges exceeded the deposit.
The appellee-landlord then sued the appellant for $300 plus attorney fees. Appellant filed a separate suit against appellee for return of his security deposit. The cases were consolidated, and the trial court found for the appellant in the amount of $20. The court refused to award attorney fees to the appellant, because the appellant rested his case before adducing evidence relating to the reasonable value of the services of his attorney.
Both parties appealed to this court from the $20 judgment in favor of appellant. The appellee's appeal was dismissed as untimely by this court. Accordingly, the only issues before this court are those raised by the appellant's appeal. The appellant assigns three errors for review.3
The only disputed amount is the sum, if any, owed by appellant on account of his admitted possession of a motorcycle on the premises. Albert C. Nozik, an officer of the appellee-corporation, testified that he saw a motorcycle on the appellant's patio on October 10, October 13, October 24, and November 7, 1979. He concluded from his observations that the motorcycle was on the premises continuously during *124 this period. The $300 figure was less than the amount to which he thought the landlord was entitled.
The appellant testified that the motorcycle belonged to his brother, and that it was on the premises for a single four-day period during October. At first he stated that this occurred near the end of October, and that the motorcycle was removed on November 1, 1979. Later in his testimony, however, he acknowledged that he received a notice on October 19, 1979, telling him to remove the motorcycle and imposing a "fine"; he stated that he had already removed the motorcycle before he received that letter.
The trial court stated that it found the $50 per day charge for the motorcycle to be reasonable and that it would enforce this provision of the lease. Although no findings of fact or conclusions of law were filed, the court apparently charged appellant $200 for the four days that the motorcycle admittedly stood on the patio, and gave the appellant the remainder of $20.4
It does not appear that the $50 per diem charge for the presence of a motorcycle was in the nature of a fee for parking or storage. The lease was not modified to permit possession of a motorcycle on the premises. Instead, the charge is in the nature of liquidated damages. It is a matter of common knowledge that motorcycles, if operated loudly, can be objects of great annoyance. This effect is magnified in densely populated places such as apartment complexes. Thus, it is not unconscionable5 for a landlord to prohibit the bringing of motorcycles on the premises.
A different issue is presented, however, by the liquidated damages clause. To be valid, a provision for liquidated damages must meet three criteria, expressed in the following excerpt fromAmerican Financial Leasing v. Miller (1974),
"`[I]t must, according to most cases, appear that the sum stipulated bears a reasonable proportion to the loss actually sustained; that the actual damages occasioned by the breach are uncertain or difficult to ascertain; and most important of all, that a construction of the contract as a whole evinces a conscious intention of the parties deliberately to consider and adjust the damages that might flow from the breach. * * *'"
Actual damages occasioned by a breach of the "no motorcycle" provision of the lease are difficult to ascertain. However, the sum of $50 per day (which in a thirty-day month would amount to $1,500) does not bear a reasonable relationship to any loss which might foreseeably be sustained. A court could take judicial notice that the operation of a motorcycle might cause great damage to a landlord, because tenants who object to loud noise might move out. However, no evidence was introduced tending to show the amount of damages which might foreseeably result from the mere presence of a motorcycle.
The liquidated damages clause contained *125
in the "Disposition Advice" is therefore invalid under the common law and under R.C.
In the absence of a valid provision for liquidated damages, the appellee was entitled to recover only the monetary equivalent of the actual damages caused by the appellant's breach. Again, however, the appellee failed to adduce any evidence tending to show that it sustained actual damages as a result of the presence of the motorcycle on the property,6 even if the motorcycle was there for one month, as claimed by appellee. In the absence of any evidence on this subject, compensatory damages may not be awarded.
The appellee did prove beyond any doubt that the appellant breached his promise not to bring a motorcycle on the property. The appellee is therefore entitled to judgment on its claim for breach of contract, and an award of nominal damages in the sum of one dollar.
The appellant proved that he was entitled to the return of his security deposit ($420) plus interest ($10.50) less one month's rent ($210), for a total of $220.50. The "double recovery" remedy of R.C.
"(A) Any security deposit in excess of fifty dollars or one month's periodic rent, whichever is greater, shall bear interest on the excess at the rate of five per cent per annum if the tenant remains in possession of the premises for six months or more, and shall be computed and paid annually by the landlord to the tenant.
"(B) Upon termination of the rental agreement any property or money held by the landlord as a security deposit may be applied to the payment of past due rent and to the payment of the amount of damages that the landlord has suffered by reason of the tenant's noncompliance with section
"(C) If the landlord fails to comply with division (B) of thissection, the tenant may recover the property and money due him,together with damages in an amount equal to the amount wrongfullywithheld, and reasonable attorneys fees." (Emphasis added.)
This court has held that the main purpose of the penalty provision of this statute is to enable a tenant to recover the wrongfully withheld portion of his security deposit at no cost to himself:
"The foregoing provisions of the Landlords and Tenants Act were designed to ensure the return of a security deposit at no cost to the tenant in cases where the security deposit has been wrongfully withheld." Sherwin v. Cabana Club Apartments (1980),
Appellee contends that it fully complied *126
with R.C.
In the case at bar, it appears from the evidence (and from the lack of evidence presented by the appellee) that the landlord wrongfully withheld $220.50 of the appellant's security deposit. Accordingly, appellant was entitled to recover $441 (twice $220.50) plus his reasonable attorney fees.
The appellant rested his case without adducing evidence as to the reasonable value of his attorney's services. In closing argument, his attorney stated that appellant would file a motion for recovery of attorney fees at the end of the summation. The trial court replied that appellant had the duty to present evidence regarding attorney fees as part of his case in chief. When appellant asked leave to reopen his case to present this evidence, leave was denied.
This court recently held that in landlord-tenant cases, attorney fees, where appropriate, are to be taxed as costs, not as damages. Drake v. Menczer (1980),
Thus, it was not incumbent upon appellant to adduce evidence on the issue of attorney fees during his case in chief. This issue is not an element of the appellant's case, but merely goes to the issue of costs, which will be assessed to the appellee. Consequently, this court is persuaded that it was an abuse of discretion for the trial court to refuse to hear the appellant's evidence, and this cause must be remanded to the trial court for a hearing on the issue of the amount of attorney fees to be awarded appellant.
"If any action is filed against Tenant, Tenant hereby waives right to trial by jury as to any action which may be filed against Tenant by Landlord." (Paragraph 4 of Lease.)
In the case at bar, both parties sued each other and their lawsuits were consolidated. Appellant was granted judgment on appellee's complaint (case No. 80-CV-F-2570), and appellant was awarded $20 on his own complaint against the appellee (case No. 80-CV-F-3226). The plain language of the waiver clause makes it applicable only to cases filed against the tenant by the landlord. Thus, in case No. 80-CV-F-3226, the case here under review, the clause is not applicable because the tenant, Berlinger, is the plaintiff, suing for the return of his security deposit.7 *127
Any ambiguity in this provision must be construed against the appellee, who drafted the language. Central Realty Co. v.Clutter (1980),
However, it does not appear that any issues remain for determination by the trier of fact. The only factual dispute involved the amount of time that the motorcycle stayed on the appellant's patio. The appellant admitted having had the motorcycle at least four days, so his breach was established. However, appellee failed to adduce evidence to support the validity of the liquidated damages clause or to prove actual damages. Consequently, as a matter of law, appellee was entitled to nominal damages, no more and no less. The issue of attorney fees is to be determined by the trial court. Therefore, the error of the trial court in refusing to order a jury trial on the appellant's complaint was not prejudicial to the appellant.
The judgment of the trial court is reversed, judgment is entered in favor of appellant in the amount of $440.00 ($441 less $1 nominal damages), and this cause is remanded to the trial court with instructions to determine and award reasonable attorney fees to appellant.
Judgment reversed and cause remanded.
DAY, P.J., and NAHRA, J., concur.
"I. The judgment and verdict of the trial court was contrary to law and against the manifest weight of the evidence.
"II. It was prejudicial error for the court not to award appellant reasonable attorney fees.
"III. It was prejudicial error for the court to strike appellant's jury demand."
Security Deposit $420.00 Plus Interest 10.50 Subtotal $430.50 Less Rent Due 210.00 Subtotal $220.50 Less Motorcycle Charge 200.00 TOTAL $ 20.50
