Sivit v. Village Green of Beachwood, L.P. ( 2013 )

[Cite as Sivit v. Village Green of Beachwood, L.P., 2013-Ohio-103.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 98401
CARLOS SIVIT, ET AL.
PLAINTIFFS-APPELLEES
vs.
VILLAGE GREEN OF BEACHWOOD, L.P., ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case Nos. CV-671776, CV-674795, CV-701195,
CV-706333, and CV-707545
BEFORE: Blackmon, P.J., Celebrezze, J., and S. Gallagher, J.
RELEASED AND JOURNALIZED: January 17, 2013
ATTORNEYS FOR APPELLANTS
Marvin L. Karp
Lawrence D. Pollack
Ulmer & Berne LLP
Skylight Office Tower, Suite 1100
1660 West 2nd Street
Cleveland, Ohio 44113
ATTORNEYS FOR APPELLEES
For Carlos Sivit, et al.
Joseph W. Diemert, Jr.
Thomas M. Hanculak
Daniel A. Powell
Mark V. Guidetti
Joseph W. Diemert, Jr. & Associates Co., LPA.
1360 S.O.M. Center Road
Cleveland, Ohio 44124
For Allstate Insurance Co., et al.
James A. Marx
Shapero & Green, LLC
Signature Square II, Suite 220
25101 Chagrin Blvd.
Beachwood, Ohio 44122
For Nationwide Mutual Insurance Co., et al.
Joseph A. Ferrante
2 Summit Park Drive, Suite 540
Independence, Ohio 44131
For Safeco Insurance Co., of America, et al.
Jeffrey A. Kaleda
Markesbery & Richardson Co., LPA
2368 Victory Parkway, Suite 200
P.O. Box 6491
Cincinnati, Ohio 45206
For State Farm Fire & Casualty Co., et al.
Richard H. Blake
Robert James
Bricker & Eckler, LLP
1001 Lakeside Avenue, Suite 1350
Cleveland, Ohio 44114
PATRICIA ANN BLACKMON, P.J.:
{¶1} Appellants, Village Green of Beachwood, L.P. (“Village Green”) and Forest
City Residential Management, Inc. (“FCRM”), appeal the trial court’s denial of their
motion for directed verdict and assign 11 errors for our review.1 Having reviewed the
record and pertinent law, we affirm the trial court’s decision. The apposite facts follow.
{¶2} In the early morning of October 23, 2007, a fire erupted and quickly
engulfed Building 8 of the Verdant at Village Green apartment complex, located at 26800
Amhearst Circle in Beachwood, Ohio. After several hours, the Beachwood Fire
Department, with mutual aid from surrounding communities, extinguished the fire. All
the residents escaped unharmed, but there was considerable property damage, and
Building 8 was ultimately demolished.
{¶3} Immediately following the fire, the Beachwood Fire and Police Departments,
the State Fire Marshall’s office, as well as professional fire investigators began
investigating the cause of the fire. Collectively, they evaluated the scene, took
photographs, and spoke to witnesses and residents to ascertain the cause of the fire.
{¶4} The occupants of Suite 310 indicated that they smelled a camp-like odor
around 1:00 p.m. the day before and notified the maintenance department of the smell of
smoke. Around 9:00 p.m., Beachwood fire and police responded to Suite 310, but could
not locate the source of the odor. The occupant of Suite 210 indicated that she smelled
a barbeque or campfire odor around 8:30 p.m. the night before the fire. The occupant of
1See appendix.
Suite 110 indicated that her lights were flickering on and off around 10:30 p.m. the night
before the fire and at approximately 11:15 p.m., she smelled the odor of burning tar.
Most of the other residents of Building 8 reported unresolved electrical and maintenance
issues with the building.
{¶5} As part of the investigation, the Beachwood Fire Department retained Ralph
Dolence (“Dolence”), a fire investigator and electrical expert, to assist in their
investigation. Dolence, who had previously been retained to investigate a fire in 2004
that destroyed Building 3 of the same apartment complex, ruled out arson or accelerants as
causes of the fire, which was supported by the other investigators.
{¶6} Following his investigation, Dolence determined that the fire originated in
the interstitial space between the floor and ceiling space of Units 210 and 310, and that
there was no fire internally in Units 110, 210, and 310. Dolence concluded that the fire
was caused by faulty electrical wiring contaminated by water leaks within the building.
Dolence’s conclusion was in keeping with that of the Beachwood Fire Department.
{¶7} On September 26, 2008, Carlos Sivit (“Sivit”), along with ten other residents
who lost most of their personal belongings and were displaced when Building 8 was
demolished, filed a complaint against several entities including Village Green and
FCRM, the managers of the developers and owners of the apartment complex, alleging
that negligence or gross negligent construction and maintenance of the building caused the
fire.
{¶8} Sivit also brought a cause of action for breach of lease alleging that Village
Green had failed to maintain Building 8 and the mechanical devices therein in a clean,
safe, and working condition. Sivit further alleged that throughout the course of the lease,
Village Green and FCRM failed to perform building repairs within a reasonable time that
were of an emergency in nature, including electrical faults and other fire hazards.
{¶9} On December 16, 2011, after a two-week trial, the jury rendered a verdict in
favor of Sivit and awarded compensatory damages of $582,328. The jury also awarded
punitive damages in the amount of $2,000,000. In addition, the trial court awarded
attorney fees in the amount of $1,040,000 to Sivit’s attorneys. Village Green and FCRM
now appeal.
Directed Verdict, Negligent Maintenance, and
Negligent Construction
{¶10} We will address assigned errors 1 and 5 together because they both contend
the trial court erred when it denied the motion for directed verdict on Sivit’s claims of
negligent maintenance and construction.
{¶11} The standard of appellate review on a motion for directed verdict is de
novo. Loreta v. Allstate Ins. Co., 8th Dist. No. 97921, 2012-Ohio-3375, citing Grau v.
Kleinschmidt, 31 Ohio St.3d 84, 90, 509 N.E.2d 399 (1987). This court is to construe the
evidence presented most strongly in favor of the nonmoving party and, after so doing,
determine whether reasonable minds could only reach a conclusion that is against the
nonmoving party. Titanium Indus. v. S.E.A. Inc., 118 Ohio App.3d 39, 691 N.E.2d 1087(7th Dist.1997), citing Byrley v. Nationwide Ins. Co., 94 Ohio App.3d 1, 640 N.E.2d 187(6th Dist.1993), appeal not accepted, 70 Ohio St.3d 1441, 638 N.E.2d 1044 (1994).
{¶12} An appellate court does not weigh the evidence or test the credibility of the
witnesses. Id. In considering the motion, this court assumes the truth of the evidence
supporting the facts essential to the claim of the party against whom the motion is directed,
and gives to that party the benefit of all reasonable inferences from that evidence. Becker
v. Lake Cty. Mem. Hosp. W., 53 Ohio St.3d 202, 206, 560 N.E.2d 165 (1990), citing Ruta
v. Breckenridge-Remy Co., 69 Ohio St.2d 66, 68, 430 N.E.2d 935 (1982).
{¶13} To prevail in a negligence action, the plaintiff must show (1) the existence of
a duty, (2) a breach of that duty, and (3) an injury proximately resulting from the breach.
Mann v. Northgate Investors L.L.C., 10th Dist. No. 11AP-684, 2012-Ohio-2871, citing
Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362, 857 N.E.2d 1195, ¶ 21. At
common law, a landlord was charged with a general duty to exercise reasonable care to
keep the premises retained in his control for the common use of his tenants in a reasonably
safe condition. Mullins v. Grosz, 10th Dist. No. 10AP-23, 2010-Ohio-3844, ¶ 23.
{¶14} In 1974, the Ohio General Assembly modified the common law regarding
landlords and tenants when it “enacted R.C. 5321.01 et seq., the Landlord-Tenant Act, in
an attempt to clarify and broaden tenants’ rights as derived from common law.” Mullins at
¶ 23.
{¶15} In Shroades v. Rental Homes, Inc., 68 Ohio St.2d 20, 427 N.E.2d 774(1981), the Supreme Court of Ohio held that a landlord is liable for injuries sustained on
leased premises that are proximately caused by the landlord’s failure to fulfill the duties
imposed by R.C. 5321.04(A), which provides, in pertinent part:
(A) A landlord who is a party to a rental agreement shall do all of the
following:
(1) Comply with the requirements of all applicable building, housing,
health, and safety codes that materially affect health and safety;
(2) Make all repairs and do whatever is reasonably necessary to put and
keep the premises in a fit and habitable condition;
***
(4) Maintain in good and safe working order and condition all electrical,
plumbing, sanitary, heating, ventilating, and air conditioning fixtures
and appliances, and elevators, supplied or required to be supplied by
him[.]
{¶16} A landlord’s violation of the duties imposed by Ohio’s Landlord-Tenant Act
constitutes negligence per se. Allstate Ins. Co. v. Henry, 12th Dist. No. CA2006-07-168,
2007-Ohio-2556, ¶ 9, citing Sikora v. Wenzel, 88 Ohio St.3d 493, 2000-Ohio-406, 727
N.E.2d 1277, syllabus. With negligence per se, proof of a landlord’s violation of the
statute dispenses with the plaintiff’s burden to establish the existence of a duty and the
breach of that duty. Henry at ¶10; Chambers v. St. Mary’s School, 82 Ohio St.3d at 563.
{¶17} However, negligence per se does not equate to liability per se, as it does not
dispense with the plaintiff’s obligation to prove the landlord’s breach was the proximate
cause of the injury complained of, nor does it obviate the plaintiff’s obligation to prove the
landlord received actual or constructive notice of the condition causing the statutory
violation. Packman v. Barton, 12th Dist. No. CA2009-03-009, 2009-Ohio-5282, citing
Turner v. Tiemeyer, 12th Dist. No. CA95-08-053, 1996 Ohio App. LEXIS 428, *3 (Feb.
12, 1996); Henry at ¶ 11. In turn, landlords will be excused from liability where they
“neither knew nor should have known of the factual circumstances that caused the
violation.” Mounts v. Ravotti, 7th Dist. No. 07 MA 182, 2008-Ohio-5045, ¶ 30, quoting
Sikora, 88 Ohio St.3d at 498.
{¶18} In the instant case, the record reveals that Village Green and FCRM’s
collective violation of the duties imposed by Ohio’s Landlord-Tenant Act proximately
caused the fire. As it relates to the claim of negligent maintenance, numerous tenants
gave statements regarding various maintenance issues with Building 8 to the on-scene
investigators at the time of the fire. Several of these tenants testified at trial, but in the
interest of brevity, the recurrent element can be summed up in the testimony of Detective
Don Breckenridge of the Beachwood Police Department. Detective Breckenridge
investigated the 2004 fire in Building 3 as well as the 2007 Fire in Building 8. Detective
Breckenridge testified in pertinent part about the 2004 and 2007 fires, as follows:
Q. Without repeating exactly what those tenants and witnesses said
to you, was there a consensus or general theme behind the
complaints or statements that you received?
A. Yes. It seemed to be a consensus of opinion that most problems
with electrical surges; lights flashing off and on, lights dimming.
There were reports of people who could hear water running
between the walls, mildew, light bulbs flashing real bright then
dim, and then finally going out; numerous fire alarms, false fire
alarms.
Q. Okay. Detective, did you then have an opportunity, in 2007, to
investigate the fire that took place in the same location but a
different building?
A. Yes.
***
Q. The general responses or theme was what, Detective?
A. Power surges, lights dimming, lights flashing off and on, light
bulbs blowing out, mildew, water in the walls, elevator not
working.
Q. Okay. And how did that compare with those that you had
investigated and found out in your investigation in the 2004 fire?
A. They seemed very much the same to me. Tr. 1305-1307.
{¶19} In addition to the tenants’ maintenance concerns, as illuminated in
Detective Breckenridge’s testimony above, Michael Farlow, Village Green’s former
maintenance supervisor, who moved out of Building 8 shortly before the fire, testified in
conformity with the tenants, as follows:
Q. * * * Okay. At some time after you moved out, did the police
ever contact you about the fire in the building?
A. Yes, they did.
Q. Okay. What was the purpose of their contacting you?
A. They wanted to know if I knew any information prior --- or about
the building since I was the most recent Maintenance Supervisor,
because I don’t think at the time they filled my position yet.
Q. Okay. What was your reaction to the news of the fire?
A. To be frank, I wasn’t surprised.
***
Q. What did you tell the police officers at that time?
A. Well, that was like four years ago but I --- like I said, I told them I
wasn’t surprised. I think he may have asked me why I said that,
and I think I just said because there was a lot of water problems
in that building, also with water and electrical problems
downstairs in the parking garage.
Q. Okay. Did you mention anything to them about your
characterization of the building as a whole?
***
A. I would say, to the best of my knowledge --- like I said, I don’t
really recall the whole report, but I probably said it was
waterlogged.
Q. And what did you mean by that?
A. With the siding especially and the roof problems with the vents
and everything, there was a lot of water inside the walls; a lot of
water infiltrating the building, especially a lot in the basement so
---
Q. And so you could see visible water infiltrating inside the
apartment building?
A. Oh, yes, absolutely. Tr. 416-418.
{¶20} Further, the record reveals that sometime in 2006, Forest City Enterprise
(“FC”) acquired a full interest in Village Green. Prior to the purchase, Rod Brannon,
FC’s Vice President of Engineering, conducted a due diligence inspection of the property.
At trial, Brannon testified that the buildings needed a lot of work due to the lack of
preventative maintenance and because of deferred maintenance. (Tr. 248.) Brannon
testified that Building 8 needed a lot of work, admitted that he was aware of the 2004 fire
in Building 3, but indicated that the purpose of his due diligence inspection was to justify a
low bid offer for the property. Tr. 253-254.
{¶21} Subsequent to Brannon’s inspection, the city of Beachwood housing
department inspected the properties and specifically noted numerous violations in Building
8. The city inspector notified Village Green in writing of the numerous violations and
advised them to refrain from renting the property until the violations were corrected,
reinspected, and certified by the city. However, the record reveals that Village Green
continued to rent out units in Building 8 despite not addressing the city’s concerns.
{¶22} Pivotally, Dolence, who as previously noted, investigated the 2004 fire in
Building 3, was present at the site during the fire, testified that the 2007 fire in Building 8
was caused by faulty electrical wiring contaminated by water leaks within the building.
Dolence specifically stated:
Water is very significant in a fire. It was the cause of this fire. If you
have an electrical issue — we talked about resistance heating, we talked
about arc tracking. Many of them are stimulated arc tracking;
specifically by water and moisture. You could have an electrical fault if
— you know, it can sit there forever or a code violation. If something
doesn’t stimulate it or a catalyst to induce it, nothing is going to happen.
That’s my opinion. And it’s always been my opinion that it’s been the
water ingress contributed with or linked with poor wiring. That was
the cause of this fire and the physical evidence in my opinion showed
that. Tr. 1187-1188.
{¶23} Here, the testimony adduced at trial, through previous tenants and previous
employees of Village Green and FCRM, as well as the city of Beachwood’s Housing
Inspection Department, along with fire investigator Dolence, clearly established that
Building 8 was in a general state of disrepair. Said testimonies also established that
electrical and water infiltration issues noted as the cause of the fire in Building 8 paralleled
the findings of the 2004 fire in Building 3.
{¶24} Of prime importance, said testimonies established that Village Green and
FCRM knew or should have known of the complained-of conditions that caused the fire
in Building 8. As such, Village Green and FCRM cannot be excused from liability under
the duties imposed by R.C. 5321.04(A)(1) or 5321.04(A)(2). Consequently, the trial court
properly denied Village Green and FCRM’s motion for directed verdict on Sivit’s
negligent maintenance claim.
{¶25} We now turn our attention to Village Green’s contention that Sivit’s
negligent construction claim should not have survived a motion for directed verdict.
{¶26} At trial, Dolence testified at length about his investigation, including
presenting a slide presentation that showed numerous pictures of Building 8. Dolence
testified that during his investigation, he observed numerous national electrical code
violations and shoddy workmanship. Dolence stated that he observed numerous examples
of unsecured feeder cables, wires double stapled, and wires pulled up against metal gusset
plates with insulation damage. Ultimately, Dolence pinpointed the root source of the fire to
three wires under the living room floor of Unit 310. We conclude, Sivit established that
Building 8 was negligently constructed.
{¶27} However, Village Green claims that liability should not have been attached
because it hired independent contractors for the construction of the property. We are not
persuaded.
{¶28} A landlord may not shift the responsibility to an independent contractor of
complying with laws designed for the physical safety of others. Shump v. First
Continental-Robinwood Assn., 71 Ohio St.3d 414, 1994-Ohio-427, 644 N.E.2d 29. Such
duties are not delegable. Id., citing Restatement of the Law 2d, Property, Section 19.1.
The record indicates that throughout the construction of the property, Village Green was
the developer and maintained oversight on the project. We have previously held that a
developer of a condominium project is liable for construction defects, notwithstanding the
fact a general contractor was hired to perform the construction work. See Point E. Condo.
Owners’ Assn. v. Cedar House Assn. Co., 104 Ohio App.3d 704, 663 N.E.2d 343 (8th
Dist. 1994). Accordingly, we overrule the first and fifth assigned error.
{¶29} Based on the foregoing, the trial court properly denied Village Green’s
motion for directed verdict on Sivit’s negligent construction claim. Accordingly, we
overrule the first and fifth assigned errors.
Manifest Weight of Evidence and Negligent Maintenance
{¶30} In the second assigned error, Village Green and FCRM argue the judgment
on Sivit’s negligent maintenance claim was against the manifest weight of the evidence.
{¶31} In Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d
517, the Ohio Supreme Court recently clarified the standard of review appellate courts
should apply when assessing the manifest weight of the evidence in a civil case. The Ohio
Supreme Court held the standard of review for manifest weight of the evidence for
criminal cases stated in State v. Thompkins, 78 Ohio St.3d 380, 1997-Ohio-52, 678 N.E.2d
541, is also applicable in civil cases. Eastley at ¶ 17-19.
{¶32} A reviewing court is to examine the entire record, weigh the evidence and all
reasonable inferences, consider the credibility of witnesses, and determine “whether in
resolving conflicts in the evidence, the finder of fact clearly lost its way and created such a
manifest miscarriage of justice that the judgment must be reversed and a new trial
ordered.” Eastley at ¶ 20, quoting Tewarson v. Simon, 141 Ohio App.3d 103, 115, 750
N.E.2d 176 (9th Dist.2001); see also Sheet Metal Workers Local Union No. 33 v. Sutton,
5th Dist No. 2011CA00262, 2012-Ohio-3549, citing State v. Martin, 20 Ohio App.3d 172,
175, 485 N.E.2d 717 (1st Dist.1983).
{¶33} In the instant case, as discussed in detail in the first and fifth assigned error,
we found the evidence presented at trial through the testimony of Building 8’s tenants,
former employees of Village Green and FCRM respectively, Detective Breckenridge, and
Dolence, clearly established that the property was negligently maintained. In the face of
the overwhelming evidence in the record regarding the state of disrepair of Building 8, we
cannot conclude that the jury lost its way and created a manifest miscarriage of justice.
Accordingly, we overrule the second assigned error.
Admission of Evidence and 2004 Fire
{¶34} In the third assigned error, Village Green and FCRM argue the trial court
erred by admitting evidence of the 2004 fire in Building 3.
{¶35} The admission or exclusion of evidence is a matter within the trial court’s
discretion and will be reversed only for an abuse of that discretion. Robertson v. Mt.
Carmel E. Hosp., 10th Dist. No. 09AP-931, 2011-Ohio-2043, ¶ 27, citing Valentine v.
Conrad, 110 Ohio St.3d 42, 2006-Ohio-3561, 850 N.E.2d 683 ¶ 9. An abuse of discretion
requires more than an error of law or judgment; it connotes that the court’s attitude is
unreasonable, unconscionable, or arbitrary. Blakemore v. Blakemore, 5 Ohio St.3d 217,
450 N.E.2d 1140 (1983). For evidence to be admissible, it must be relevant. Pazin v.
Pazin, 7th Dist. No. 07-CO-43, 2008-Ohio-6975; Evid.R. 402. Evidence is relevant if it
has any tendency to make the existence of any fact that is of consequence in the
determination of an action more or less probable. Id.; Evid.R. 401.
{¶36} In the instant case, as previously discussed, the cause of the 2004 fire
in Building 3 was identical to the cause of the 2007 fire in Building 8. Detective
Breckenridge, who investigated both fires, testified that the tenants’ complaints regarding
electrical and water problems were substantially the same. Dolence testified that the same
factors caused both fires. Specifically, after the 2004 fire in Building 3, Dolence
concluded that it originated in the interstitial space between the floor and ceiling of units
311 and 211. Likewise, and as previously stated, Dolence concluded that the 2007 fire in
Building 8 originated in the interstitial space between the floor and ceiling of units 210
and 310.
{¶37} Here, introduction of evidence relating to the fire in 2004 was relevant to
the claims of negligent construction and maintenance. In addition, it was relevant to show
that Village Green and FCRM were on notice of the conditions leading to the 2007 fire in
Building 8. As such, the trial court did not abuse its discretion in admitting evidence of
the 2004 fire in Building 3. Accordingly, we overrule the third assigned error.
Jury Instruction, Negligent Maintenance,
and Negligent Construction
{¶38} We will address assigned errors 4 and 6 together because they both contend
the trial court erroneously instructed the jury on Sivit’s negligent maintenance and
construction claims.
{¶39} When considering the appropriateness of a jury instruction, or when a
specific jury instruction is in dispute, a reviewing court must examine the instructions as a
whole. Withers v. Mercy Hosp. of Fairfield, 12th Dist. No. CA2010-02-033,
2010-Ohio-6431, citing Enderle v. Zettler, 12th Dist. No. CA2005-11-484,
2006-Ohio-4326; Coyne v. Stapleton, 12th Dist. No. CA2006-10-080, 2007-Ohio-6170.
{¶40} Taken in their entirety, when the instructions fairly and correctly state the law
applicable to the evidence presented at trial, reversible error will not be found merely on
the possibility that the jury may have been misled. Wozniak v. Wozniak, 90 Ohio App.3d
400, 410, 629 N.E.2d 500 (9th Dist.1993), citing Ohio Farmers’ Ins. Co. v. Cochran, 104
Ohio St. 427, 135 N.E. 537 (1922).
{¶41} Moreover, misstatements and ambiguity in a portion of the instructions will
not constitute reversible error unless the instructions are so misleading that they
prejudicially affect a substantial right of the complaining party. Wozniak at 410. Silver v.
Jewish Home of Cincinnati, 190 Ohio App.3d 549, 2010-Ohio-5314, 943 N.E.2d 577 (12th
Dist.).
{¶42} In the instant case, the evidence presented at trial on the issues of negligent
maintenance and construction was exhaustive. The record indicates that the trial court’s
jury instructions comported with the evidence presented. As such, we find no merit to
Village Green and FCRM’s contention. Accordingly, we overrule the fourth and sixth
assigned errors.
Damages
{¶43} In the seventh assigned error, Village Green and FCRM argue the trial court
erred when it allowed seven plaintiffs to each recover an additional $5,000 in damages that
had not been previously included on the property inventory.
{¶44} We first note that the assessment of damages is a matter within the province
of the jury. Retina Assn. of Cleveland v. Smith, 11th Dist. No. 2002-T-0170,
2003-Ohio-7188, citing Weidner v. Blazic, 98 Ohio App.3d 321, 334, 648 N.E.2d 565(12th Dist.1994). Therefore, to prevail on a motion for a new trial based on the jury’s
assessment of damages, the moving party must demonstrate that the verdict was the result
of jury passion or prejudice and that it was so disproportionate in amount as to shock
reasonable sensibilities. Id.{¶45} In the instant case, the jury awarded each plaintiff the additional $5,000 to
cover the loss of miscellaneous household items that had not been previously itemized.
Under the circumstances, where you have lost all your personal belongings and invariably
do not remember certain items until much later, $5,000 is hardly a sum that would shock
reasonable sensibilities. Nonetheless, Village Green and FCRM contend the trial court
erred in allowing the additional amount.
{¶46} A reviewing court generally will not reverse a trial court’s decision regarding
its determination of damages absent an abuse of discretion. Kaufman v. Byers, 159 Ohio
App.3d 238, 2004-Ohio-6346, 823 N.E.2d 530 (11th Dist.), citing Williams v. Kondziela,
11th Dist. No. 2002-L-190, 2004-Ohio-2077, citing Roberts v. United States Fid. & Guar.
Co., 75 Ohio St.3d 630, 634, 1996-Ohio-101, 665 N.E.2d 664 (1996).
{¶47} Here, we find no evidence that the trial court exhibited an unreasonable,
arbitrary, or unconscionable attitude in allowing the additional $5,000 per plaintiff to
stand. Blakemore, supra. Accordingly, we overrule the seventh assigned error.
Punitive Damages
{¶48} In the eighth assigned error, Village Green argues the trial court erred by
including the issue of punitive damages in the trial.
{¶49} The decision whether to award punitive damages is within the trial court’s
discretion and, absent an abuse of discretion, the court’s ruling will be upheld. Kemp v.
Kemp, 161 Ohio App.3d 671, 2005-Ohio-3120, 831 N.E.2d 1038 (5th Dist.). Ohio law
provides that an award of punitive damages is available only on a finding of actual malice.
Berge v. Columbus Community Cable Access, 136 Ohio App.3d 281, 316, 736 N.E.2d
517 (10th Dist.1999).
{¶50} The “actual malice” necessary for purposes of an award of punitive damages
has been defined as “‘(1) that state of mind under which a person’s conduct is
characterized by hatred, ill will or a spirit of revenge, or (2) a conscious disregard for the
rights and safety of other persons that has a great probability of causing substantial harm.’”
Id., quoting Preston v. Murty, 32 Ohio St.3d 334, 512 N.E.2d 1174 (1987), at syllabus.
{¶51} As discussed throughout, the testimony presented at trial established that
Village Green consciously ignored the severe state of disrepair of Building 8, despite
being presented with glaring evidence. Village Green totally disregarded the rights and
safety of its tenants. The tenants had a litany of electrical and water-related complaints
that remained unaddressed.
{¶52} As such, Village Green’s inaction was sufficient to support a finding of
malice to justify awarding punitive damages. Consequently, the trial court did not err in
allowing the claim for punitive damages to be submitted to the jury. Accordingly, we
overrule the eighth assigned error.
Punitive Damages and Manifest Weight of the Evidence
{¶53} In the ninth assigned error, Village Green argues the award of punitive
damages was against the manifest weight of the evidence.
{¶54} Punitive damages are intended to deter conduct resulting from a mental state
that is so callous in its disregard for the rights and safety of others that society deems it
intolerable. Gold Craft Co. v. Egbert’s Constr. & Remodeling, L.L.C., 10th Dist. No.
09AP-448, 2010-Ohio-3741, citing Ward v. Hengle, 124 Ohio App.3d 396, 405, 706
N.E.2d 392 (9th Dist.1997), quoting Calmes v. Goodyear Tire & Rubber Co., 61 Ohio
St.3d 470, 473, 575 N.E.2d 416 (1991). A party seeking punitive damages has the burden
of proving by clear and convincing evidence that it is entitled to them. Cabe v. Lunich, 70
Ohio St.3d 598, 601, 1994-Ohio-4, 640 N.E.2d 159.
{¶55} As discussed in the preceding assigned error, the issue of punitive damages
was properly allowed to go to the jury. As previously stated, Village Green totally
disregarded the rights and safety of its tenants by failing to address the electrical and water
infiltration issues that were brought to their attention through tenants’ complaints, previous
employees, the city inspector, and the 2004 fire in Building 3.
{¶56} We conclude, the plaintiffs carried their burden of proving by clear and
convincing evidence that they were entitled to punitive damages. Accordingly, we
overrule the ninth assigned error.
Punitive Damages and Cap
In the tenth assigned error, Village Green argues the trial court erred when it failed to cap
the award of punitive damages. Specifically, Village Green argues that R.C. 2315.21
required the trial court to limit the punitive damages award to an amount that was two
times the compensatory damages.
{¶57} The recovery and determination of punitive damage awards is addressed in
R.C. 2315.21 and states in pertinent part as follow:
“(A) As used in this section: (1) “Tort action” means a civil action for
damages for injury or loss to person or property. “Tort action” includes
a product liability claim for damages for injury or loss to person or
property that is subject to sections 2307.71 to 2307.80 of the Revised
Code, but does not include a civil action for damages for a breach of
contract or another agreement between persons.”
{¶58} Initially, we note, a plain reading of the statute reveals that the Ohio
General Assembly specifically exempted civil actions for damages in contract when it
stated the following: “but does not include a civil action for damages for breach of
contract or another agreement between the parties.” In construing a statute, a court’s
paramount concern is the legislative intent in enacting the statute. Rice v. CertainTeed
Corp., 84 Ohio St.3d 417, 1999-Ohio-361, 704 N.E.2d 1217. To this end, we must first
look to the statutory language and the “purpose to be accomplished.” Id. In assessing the
language employed by the General Assembly, the court must take words at their usual,
normal, or customary meaning. Most important, it is the court’s duty to “give effect to the
words used and to refrain from inserting words not used.” Id.{¶59} Because Landlord-Tenant agreements are contractual in nature and injurious
conduct arising out of the contract is not a tort action, as defined above, but “another
agreement between the parties,” we agree with the trial court and hold as a matter of law
that this action is not subject to R.C. 2315.21. The trial court specifically invoked this
provision when it denied Village Green’s motion to invoke R.C. 2315.21 and cap the
punitive damages awarded.
{¶60} In the instant case, plaintiffs sued Village Green for violating the statutory
duties imposed under R.C. 5321.04, Ohio’s Landlord-Tenant Act. The jury found that
Village Green, the landlord, breached its duties imposed by the statute and as such
breached the rental agreement between the parties. Of note, the only relationship between
Village Green and the individual plaintiffs is that borne out in the rental agreement —
specifically, Village Green’s promise to fulfill the duties imposed by R.C. 5321.04(A) and
the plaintiffs-tenants’ duty to, but not limited to, pay the rent on time. As such, said rental
agreement is a “* * * contract or another agreement between persons,” as defined above.
{¶61} As previously discussed at length in the first and fifth assigned errors, the
jury found that Village Green breached the duty created by Section 5321.04 by failing to
keep the premises in a fit and habitable condition, failing to keep all common areas of the
premises in a safe and sanitary condition, and failing to maintain in good and safe working
order and condition all electrical fixtures required to be supplied by them. The jury
further found that Village Green demonstrated a reckless disregard for the rights and
safety of these tenants, the plaintiffs herein, and awarded punitive damages in accordance
with that finding. Tr. 2564-2565.
{¶62} We are mindful that punitive damages are generally not recoverable in a
breach of contract action. Mabry-Wright v. Zlotnik, 165 Ohio App.3d 1, 2005-Ohio-5619,
844 N.E.2d 858 (3d Dist.), citing Digital & Analog Design Corp. v. N. Supply Co., 44
Ohio St.3d 36, 540 N.E.2d 1358 (1989). However, punitive damages are recoverable in a
civil action alleging a breach of contract where the conduct constituting the breach is also
a tort for which punitive damages are recoverable. Unifirst Corp. v. Yusa Corp., 12th Dist.
No. CA2002-08-014, 2003-Ohio-4463. Here, Village Green breached the contractual
agreement by negligently maintaining Building 8.
{¶63} We also find that the trial court’s reliance on Kramer Consulting, Inc. v.
McCarthy, S.D. Ohio No. C2-02-116, 2006 U.S. Dist. LEXIS 12857 (Mar. 8, 2006), was
not misplaced. In Kramer, the district court held that the definition of “tort action”
outlined in R.C. 2315.21 did not apply to R.C. 1701.59, which governed the breach of
fiduciary claim at issue.
{¶64} In addition, we remain reliant on our determination in Luri v. Republic
Servs., 193 Ohio App.3d 682, 2011-Ohio-2389, 953 N.E.2d 859 (8th Dist.), rev’d on other
grounds, 132 Ohio St.3d 316, 2012-Ohio-2914, 971 N.E.2d 944, that R.C. 2315.21
applies to retaliatory discharge actions brought under R.C. Chapter 4112, and that the trial
court was required to apply its provisions if appropriately asked. Id. Unlike Luri, in the
present action, it is Village Green’s noncompliance with the Landlord-Tenant Act and the
duties that arise from the rental agreement that formed the basis of plaintiffs’s negligence
action. In Luri, there was no semblance of “another agreement between the parties.” As
such, R.C. 2315.21 does not apply to the punitive damages recovered in the instant case.
{¶65} We conclude that in enacting R.C. 2315.21, the General Assembly was
mindful that when parties agree in writing to a code of conduct, the legislature will not
adjust or interfere in the parties’ agreement. As such, when Village Green, the landlord,
agreed to certain defined conduct, imposed by R.C. 5321.04(A), and plaintiffs-tenants
agreed, among other things, to pay their rents on time, the intent of the legislature is not to
interfere with the parties’ contracts nor bring their agreement under the purview of R.C.
2315.21.
{¶66} Unlike an action where the parties have no agreement, but instead, the legal
relationship is defined solely by the tortuous conduct of the wrongdoer, such as in Luri,
then R.C. 2315.21 would be applicable to cap a punitive damages award. Under the
circumstances, the trial court did not err when it denied Village Green’s request to cap the
punitive damages award. Accordingly, we overrule the tenth assigned error.
Attorney Fees
{¶67} In the eleventh assigned error, Village Green argues the trial court abused its
discretion in the amount of attorney fees it awarded.
{¶68} Initially, we note, attorney fees may be awarded as an element of
compensatory damages where the jury finds that punitive damages are warranted. See,
e.g., Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552, 1994-Ohio-461, 644 N.E.2d 397.
{¶69} In the preceding assigned error, we concluded that the trial court did not err
by refusing to limit the punitive damages award to twice the amount of the compensatory
damages. The record reveals that plaintiffs’ counsel was operating under a contingent fee
basis. Specifically, the contingent fee was 40 percent of the amount recovered. The trial
court awarded plaintiffs’ attorney $1,040,000 in fees or 40 percent of the approximately
$2,600,000 that plaintiffs received in compensatory and punitive damages.
{¶70} The record reveals that plaintiffs’ counsel submitted an unchallenged lodestar
calculation to justify the fees. The United States Supreme Court has prescribed the
“lodestar” method for calculating reasonable attorney fees, which requires a multiplication
of the “number of hours reasonably expended on the litigation times a reasonable hourly
rate.” See Blanchard v. Bergeron, 489 U.S. 87, 94, 109 S.Ct. 939, 103 L.Ed.2d 67 (1989),
quoting Blum v. Stenson, 465 U.S. 886, 888, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984). The
lodestar is strongly presumed to yield a “reasonable” fee. See Burlington v. Dague, 505
U.S. 557, 562, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992).
{¶71} “Reasonable fees” are to be calculated according to the prevailing market
rates in the relevant community, taking into consideration the experience, skill, and
reputation of the attorney. See Blum, 465 U.S. at 895.
“To inform and assist the court in the exercise of its discretion, the
burden is on the fee applicant to produce satisfactory evidence — in
addition to the attorney’s own affidavits — that the requested rates are
in line with those prevailing in the community for similar services by
lawyers of reasonably comparable skill, experience and reputation.” Id.
at 896.”
{¶72} In the instant case, the trial court was mindful that the lawsuit was filed in
2008, involved extensive investigation and discovery, and involved a 10-day jury trial
followed by significant post-verdict motions. The trial court also heard testimony that
Village Green sent plaintiffs’ attorney 42 disorganized banker boxes of construction
documents, maintenance records, and public records that had to be sifted through by the
firm’s paralegal. Further, the trial court considered that plaintiffs’ counsel undertook the
case on a contingent fee basis, expending time and resources, with no guarantee of
success.
{¶73} Based on the aforementioned, we conclude that the trial court did not err in
the amount of attorney fees awarded. Accordingly, we overrule the eleventh assigned
error.
{¶74} Judgment affirmed.
It is ordered that appellees recover from appellants their 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.
PATRICIA ANN BLACKMON, PRESIDING JUDGE
FRANK D. CELEBREZZE, JR., J., and
SEAN C. GALLAGHER, J., CONCUR
APPENDIX
Assignments of Error
I. The Trial court erred in denying defendants’ motion for directed verdict with respect to
plaintiffs’ claim for negligent maintenance.
II. The judgment against each defendants with respect to negligent maintenance was
contrary to the manifest weight of the evidence.
III. The trial court erred in allowing the jury to consider evidence relating to the 2004 fire
in Building 3.
IV. The trial court erred in instructing the jury with respect to plaintiffs’ negligent
maintenance claim.
V. The trial court erred in denying Village Green of Beachwood’s motion for directed
verdict with respect to plaintiffs’ claim for negligent construction of Building 8.
VI. The trial court erred in instructing the jury that defendant Village Green of Beachwood
was strictly liable for any negligence in the construction of Building 8.
VII. The trial court erred in allowing seven plaintiffs to each recover $5000 more than the
amount of damages that they testified to at trial.
VIII. The trial court erred in allowing plaintiffs’ claim for punitive damages to go to the
jury.
IX. The judgment against defendant Village Green of Beachwood for punitive damages
was contrary to the manifest weight of the evidence.
X. The trial court erred in refusing to “cap” the award of punitive damages as required by
R.C. 2315.21(D)(2)(a).
XI. The trial court erred in its determination of the amount of attorney fees to be awarded
to plaintiffs.