CLEVELAND TOWN CENTER, L.L.C. v. FINANCIAL EXCHANGE COMPANY OF OHIO, INC.
No. 104162
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
February 2, 2017
2017-Ohio-384
BEFORE: Keough, A.J., E.A. Gallagher, J., and Boyle, J.
Civil Appeal from the Cuyahoga County Court of Common Pleas, Case No. CV-14-837122
Douglas E. Bloom
24460 Aurora Road
Bedford Heights, Ohio 44146
ATTORNEYS FOR APPELLEE
Timothy J. Gallagher
Christopher J. Weber
Kegler, Brown, Hill & Ritter Co., L.P.A.
600 Superior Avenue, Suite 2510
Cleveland, Ohio 44114
{¶1} Plaintiff-appellant, Cleveland Town Center, L.L.C. (“CTC“), appeals from the trial court‘s judgment that granted summary judgment to defendant-appellee, Financial Exchange Company of Ohio, Inc. (“FECO“). FECO cross-appeals from the trial court‘s judgment that failed to award FECO attorney and expert witness fees incurred in preparing for and attending a hearing regarding the amount of attorney fees and court costs to be awarded FECO upon the trial court‘s grant of summary judgment. We affirm the trial court‘s judgment.
I. Facts and Procedural History
{¶2} In 1992, FECO entered into a lease agreement to rent commercial property in a shopping center located at 14333 Euclid Avenue in Cleveland. Throughout the lease period, FECO operated a Money Mart store at the property, offering, among other things, check cashing services and the purchase of precious metals.
{¶3} The parties’ agreement was amended and extended in 2002 and again in 2005. CTC acquired the property in 2006. In October 2010, FECO and CTC entered into a lease amendment that extended the lease for an additional two years (until October 31, 2012) at the base monthly rent of $1600 per month, and gave FECO the option to renew the lease for two additional five-year periods. In April 2012, FECO notified CTC that it was exercising one of its options to renew the lease agreement for another five years, until October 31, 2017.
The Landlord covenants that so long as the Tenant is in actual possession of the Premises and is carrying on its business in the Premises in accordance with the terms of the Lease, the Landlord will not, at any time during the initial Term of the Lease or any extension thereof, permit any other tenant or occupant of the center to carry on or offer the services of check cashing, cash wire services, sale of money orders, cash advances, consumer loans, Western Union Agent (other than a chartered bank or trust company), purchase of precious metals, pawning, or income tax preparation, e-filing, and discounting.
In the event that the Tenant produces a documented occurrence of another tenant in breach of above said Exclusivity, the Tenant, at its entire discretion, may either terminate the Lease on thirty (30) days written notice to the Landlord, or the Tenant may choose to conduct business at a base rental rate of $800.00 per month until the end of the term or until such time the tenant breaching the above said Exclusivity vacates the center.
{¶5} On November 8, 2011, FECO provided written notice to CTC that “other tenants at the property are cashing checks and providing income tax preparation, e-filing and discounting” in violation of the lease agreement, such that FECO was exercising its right to reduce its base monthly rental rate to $800. Thereafter, from November 2011 through August 2014, FECO paid and CTC accepted rental payments at a monthly base rate of $800.
{¶6} On July 28, 2014, FECO gave CTC written notice of its election to terminate the lease agreement as of August 31, 2014, because another tenant at the property was purchasing precious metals, in violation of the lease agreement.
{¶7} CTC subsequently brought suit against FECO for breach of contract. It claimed that FECO had breached the lease agreement by (1) failing to pay the full rental
{¶8} Both parties subsequently filed motions for summary judgment. The trial court granted FECO‘s motion and denied CTC‘s motion. In its written decision, that trial court found that in 2011, FECO notified CTC that other tenants on the property were cashing checks and providing income tax preparation, e-filing and discounting, in violation of the lease agreement, and that FECO properly elected at that time to pay a reduced base monthly rent of $800 as provided by the lease agreement.
{¶9} The trial court further found that FECO‘s notice to CTC in 2014 that another tenant was selling precious metals on the property was a report of a new violation that triggered for that violation an election of remedies — either reduced rent or termination of the lease — and that FECO‘s decision to terminate the lease was within its prerogative. Accordingly, the trial court found that FECO was not obligated to pay rent or any other charges under the lease after August 31, 2014.
{¶10} The trial court further found that as the prevailing party, FECO was entitled under the lease agreement to recover its reasonable attorney fees and court costs. The court set a date for an evidentiary hearing to determine the attorney fees and costs, but
{¶11} FECO‘s counsel sent a letter to CTC‘s counsel with a copy of its invoice to FECO for services rendered through the date of the trial court‘s decision, and asked if CTC would stipulate to the attorney fees in order to avoid a hearing. The letter advised that should CTC not stipulate, FECO would seek to recover the additional attorney fees and costs associated with any hearing to recover its fees. CTC did not stipulate, and thereafter the trial court conducted an evidentiary hearing to determine the amount of FECO‘s reasonable attorney fees and costs.
{¶12} At the hearing, FECO presented the testimony of its attorney, along with supporting evidence, to establish the attorney fees and costs FECO incurred from the commencement of the action through the issuance of the trial court‘s decision. FECO also presented expert testimony to establish that the attorney fees and expenses were reasonable and necessarily incurred. CTC did not present any evidence at the hearing, and did not object to any of FECO‘s evidence.
{¶13} After the hearing, FECO submitted a supplemental memorandum in support of its recovery of $5,107.06 in attorney fees and $2,351.68 in expert fees incurred in preparing for and appearing at the hearing. The trial court subsequently ordered that FECO was entitled to recover $16,170.86 in attorney fees and costs. The trial court‘s order did not include an award for attorney fees incurred after the trial court‘s decision
II. Law and Analysis
A. CTC‘s Appeal
{¶14} In its assignment of error, CTC asserts that the trial court erred in granting summary judgment to FECO on its counterclaim for declaratory judgment.
{¶15} Under
{¶16} On a motion for summary judgment, the moving party carries the initial burden of identifying specific facts in the record that demonstrate its entitlement to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the moving party fails to meet this burden, summary judgment is not appropriate; if the moving party meets this burden, the nonmoving party has the
{¶17} The trial court found that FECO advised CTC in 2011 that other tenants at the property were violating the exclusivity provision by cashing checks and providing income tax preparation, e-filing and discounting. It further found that in 2014, FECO advised CTC that another tenant was in violation of the exclusivity provision because it was buying and selling precious metals. The trial court found that this was a new violation of the exclusivity provision — not another violation by the same tenant — and therefore, under the exclusivity provision, FECO was entitled to elect termination of the lease agreement as its remedy. The trial court found that FECO had therefore not breached the agreement, and it granted summary judgment to FECO on its claim for declaratory judgment. On appeal, CTC contends that the trial court erred in granting summary judgment because FECO did not provide sufficient evidence of a new violation to trigger an election of remedies under the exclusivity provision.
{¶18} CTC‘s argument is without merit. The sworn affidavit of Brian McAndrews, FECO‘s senior vice-president, was attached to FECO‘s motion for summary judgment. In his affidavit, McAndrews averred that on November 8, 2011, FECO gave CTC written notice that other tenants at the property were performing check cashing services in violation of the exclusivity provision of the lease agreement. A copy of the 2011 letter was attached as an exhibit to McAndrews‘s affidavit. In the letter, FECO advised CTC
{¶19} McAndrews further averred that on July 28, 2014, FECO gave CTC written notice that “another tenant” was performing services that fell within the scope of the exclusivity provision. A copy of the July 28, 2014 letter was attached as an exhibit to McAndrews‘s affidavit. In this letter, McAndrews advised CTC that other tenants at the property were providing “income tax preparation, e-filing and purchase of precious metals” and directed CTC to a picture attached to the letter. The undated picture showed two tenants at the property located immediately adjacent to Money Mart; one provided tax preparation services; the other offered “cash for gold.”
{¶20} CTC objects on appeal that the “only evidence” of the new violation was the picture, and asserts that the picture is insufficient to establish a new violation because “there is no evidence in the record of who took this picture, when the picture was taken, and what this picture was taken of.” CTC contends that this “scant evidence,” coupled with its assertion that this was not a new but merely an ongoing violation since 2011, demonstrates that FECO‘s evidence of a new violation was insufficient to demonstrate there were no genuine issues of material fact for trial.
{¶21} CTC waived any argument on appeal regarding the authenticity or adequacy of the photograph, however, because it raised no objection to the photograph in the trial court. In its combined motion for summary judgment and brief in opposition to FECO‘s motion for summary judgment, CTC made no reference whatsoever to the photograph.
{¶22} Moreover, CTC offered no evidence whatsoever in the trial court to rebut FECO‘s evidence that another tenant was purchasing precious metals, and that this was a new violation, separate from the prior conduct that triggered FECO‘s right to pay reduced monthly rent under the exclusivity provision. In response to FECO‘s motion for summary judgment, CTC‘s burden was to set forth specific facts showing that there was a genuine issue for trial. See
{¶23} CTC‘s assignment of error is overruled.
B. FECO‘s Cross-Appeal
{¶24} The trial court awarded FECO $16,170.86 in attorney fees and costs under Section 22 of the lease agreement, which provides that “[i]f any legal action is instituted
{¶25} A party seeking an award of attorney fees has the burden of demonstrating the reasonable value of such services. Buck v. Pine Crest Condo. Assn. Group D-E-F, 8th Dist. Cuyahoga No. 97861, 2012-Ohio-5722, ¶ 26. Ordinarily, the award of attorney fees is within the discretion of the trial court. Id. Absent a clear abuse of that discretion, the lower court‘s decision should be affirmed. Id.
{¶26} An abuse of discretion involves far more than a difference in opinion. Huffman v. Hair Surgeon, Inc., 19 Ohio St.3d 83, 482 N.E.2d 1248 (1985). An abuse of discretion occurs when the result is “so palpably and grossly violative of fact and logic that it evidences not the exercise of will but the perversity of will, not the exercise of judgment but the defiance thereof, not the exercise of reason but rather of passion or bias.” Id. In this case, we cannot say that the trial court abused its discretion in declining to award prehearing attorney and expert witness fees.
{¶28} With respect to the prehearing attorney fees, FECO refers us to cases in which courts have held that it is error not to award attorney fees incurred in preparing for a hearing on the reasonableness of attorney fees. However, all of the cases cited by FECO involve attorney fees awarded by statute, such as the Fair Labor Standards Act and the Civil Rights Attorneys’ Fees Awards Act. As stated by this court in Turner v. Progressive Corp., 140 Ohio App.3d 112, 746 N.E.2d 702 (8th Dist.2000), failure in such cases to compensate an attorney for the time spent expended on the attorney fee application “would not comport with the purpose behind most statutory fee authorizations, viz, the encouragement of attorneys to represent indigent clients and to act as private attorneys general in vindicating congressional policies.” Id. at 118, citing Gagne v. Maher, 594 F.2d 336, 334 (2d Cir.1979).
{¶30} FECO‘s cross-assignment of error on its cross-appeal is overruled.
{¶31} Judgment affirmed.
It is ordered that the parties share equally the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
KATHLEEN ANN KEOUGH, ADMINISTRATIVE JUDGE
EILEEN A. GALLAGHER, J., and MARY J. BOYLE, J., CONCUR