Abrams v. Grenny Properties, L.L.C. ( 2016 )

[Cite as Abrams v. Grenny Properties, L.L.C., 2016-Ohio-8303.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 104452
PHILLIP ABRAMS
PLAINTIFF-APPELLEE
vs.
GRENNY PROPERTIES, L.L.C.
DEFENDANT-APPELLANT
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Garfield Heights Municipal Court
Case No. CVI 1503200
BEFORE: E.T. Gallagher, J., McCormack, P.J., and Celebrezze, J.
RELEASED AND JOURNALIZED: December 22, 2016
ATTORNEY FOR APPELLANT
Robert N. Pelunis
P.O. Box 39242
Solon, Ohio 44139
FOR APPELLEE
Phillip Abrams, pro se
2988 S. Moreland
Shaker Heights, Ohio 44120
EILEEN T. GALLAGHER, J.:
{¶1} This cause came to be heard on the accelerated calendar pursuant to App.R.
11.1 and Loc.R. 11.1. Defendant-appellant, Grenny Properties, L.L.C. (“Grenny”),
appeals a judgment rendered in favor of plaintiff-appellee, Phillip Abrams (“Abrams”), in
the amount of $345. Grenny raises two assignments of error:
1. The trial court did not properly interpret the lease agreement entered
into and agreed to by the parties.
2. The trial court improperly awarded judgment in favor of appellee and
against appellant, against the manifest weight of the evidence, and said
judgment was not correct given the findings of fact in the court’s judgment
entry.
{¶2} We find merit to the appeal and reverse.
I. Facts and Procedural History
{¶3} Grenny is a property management company that leases residential properties
to tenants throughout the greater Cleveland area. On August 31, 2015, Abrams signed a
lease for property located in Garfield Heights, Ohio. The preprinted terms of the lease
required Abrams to pay a security deposit in the amount of $895 and rent in the amount of
$945 per month. Paragraph 11 of the lease agreement provides, in relevant part:
You agree to furnish the following utilities[,] which are in our exclusive
control ad [sic] are supplied by public utility[,] which you agree to have
placed in your name once you take possession and occupancy or once the
lease becomes effective which ever comes first: water/sewer, electric, gas,
phone, cable, and/or any necessary utilities for home function.
A “Utility Addendum” to the lease provides that “[s]hould Tenant(s) choose to leave
billing for water and sewer services remaining in Landlord(s)’s name[,] a utility deposit
of $600.00 (Six Hundred Dollars) will be required to be made with the Landlord(s).”
{¶4} According to Abrams’s complaint, Abrams gave Grenny a cash payment
totaling $1,780 on August 31, 2015. The payment represented a security deposit of $850
and a partial first month rent payment of $930. According to the uncontroverted
statements in Grenny’s brief, Grenny never delivered possession of the property to
Abrams because Abrams failed to pay the full amount of the security deposit and first
month’s rent.
{¶5} Abrams filed a pro se complaint in the Garfield Municipal Court, requesting
the return of his $1,780 cash payment because Grenny never delivered possession of the
leased property. Grenny filed an answer and counterclaim, seeking a judgment against
Abrams in the amount of $12,500, plus attorney fees and court costs.
{¶6} Based on the evidence presented at a bench trial, the trial court found in favor
of Grenny on its counterclaim in the amount of $1,335. The court also found that
Abrams was entitled to judgment against Grenny in the amount of $345, which the court
determined represented “the difference between the amount of $1,780 he paid in cost less
the damages owing to the defendant.” Grenny now appeals the trial court’s judgment.
II. Law and Analysis
{¶7} In the first assignment of error, Grenny argues the trial court erroneously
misinterpreted the terms of the parties’ lease agreement.
{¶8} The interpretation of a contract is a question of law subject to de novo
review. Continental W. Condo. Unit Owners Assn. v. Howard E. Ferguson, Inc., 74
Ohio St.3d 501, 502, 660 N.E.2d 431 (1996). We, therefore, interpret the terms of the
parties’ lease de novo.
{¶9} Leases are contracts subject to the traditional rules of contract interpretation.
DDR Rio Hondo, L.L.C. v. Sunglass Hut Trading, L.L.C., 8th Dist. Cuyahoga No. 98986,
2013-Ohio-1800, ¶ 13. A contract that is clear and unambiguous requires no real
interpretation or construction and will be given the effect called for by the plain language
of the contract. Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51, 55,
544 N.E.2d 920 (1989).
{¶10} The parties’ lease agreement consists of a document titled “Residential
Rental Agreement” and a separate untitled document that provided additional terms. For
purposes of discussion, we shall refer to this untitled document as the “security
agreement.” As relevant here, the security agreement states:
Should failure of remaining balance(s) by due date and/or breach of the
lease agreement occurs, lessee hereby acknowledges and understands, and
agrees this is a non-refundable deposit and shall be forfeited and
enforcement of lease remains in effect.
No possession to the property will be given until cleared funds are received
in full.
{¶11} It is undisputed that Abrams paid less than the full amounts of the security
deposit and the first month’s rent as provided in the preprinted “Residential Rental
Agreement.” However, handwritten notes on the security agreement indicate that
Abrams paid $1,780 in cash and Grenny accepted it at the time the parties executed the
agreement on August 31, 2015. The handwritten notes indicate Grenny accepted that
Abrams owed a balance of $25 and a $600 utility deposit since he had not placed all the
utilities in his name. Thus, the handwritten notations created new terms that were not
contained in the preprinted documents.
{¶12} To be enforceable, a contract must have “an offer, acceptance, contractual
capacity, consideration (the bargained for legal benefit and/or detriment), a manifestation
of mutual assent and legality of object and of consideration.” Kostelnik v. Helper, 96
Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, ¶ 16.
{¶13} An acceptance that changes the terms of the contract does not create a
binding contract because it constitutes a counteroffer. Foster v. Ohio State Univ., 41
Ohio App.3d 86, 88, 534 N.E.2d 1220 (10th Dist.1987), citing 1 Restatement of the Law
2d, Contracts, Section 59, at 145 (1981). If the counteroffer is accepted, a new contract
is formed based on the terms of the counteroffer as opposed to the terms of the original
offer. See, e.g., BR Kettering Towne Ctr. L.L.C. v. Golden City Ballroom L.L.C., 2d
Dist. Montgomery No. 26718, 2016-Ohio-5159.
{¶14} The fact that Grenny accepted the reduced amount of the rent and security
deposit at the time the parties executed the lease indicates it agreed, at the very least, to
allow Abrams to move into the residence even though he had not paid the full amount of
the security deposit set forth in the preprinted lease. There was no agreement before
August 31, 2015, when Abrams tendered the $1,780 in cash and newly negotiated terms
were handwritten on the security agreement. Thus, the record shows that Abrams’s
tender, in cash, of $1,780 constituted a counteroffer, which Grenny accepted when it took
Abrams’s cash and noted that he owed a balance of $25 plus a utility deposit of $600.
{¶15} According to the uncontroverted statements in Grenny’s appellate brief,
Grenny did not deliver possession of the residence to Abrams “due to [Abrams’s] not
paying the full amount of the security deposit and not transferring utilities pursuant to the
terms of the lease agreement.” (Appellant’s brief at 4.) However, by accepting
Abrams’s tender of $1,780 as security deposit and first month’s rent, the parties modified
the terms of the original lease, and Grenny was obliged to deliver possession of the leased
premises. It should not have accepted Abrams’s cash tender if it had no intention of
delivering possession of the premises to him.
{¶16} Furthermore, the security agreement provides that Abrams’s security deposit
was only nonrefundable if he failed to make timely rent payments or otherwise breached
the lease. Abrams could not have breached the lease because he never took possession
of the premises, and he provided an acceptable payment of rent and security deposit at the
time the lease agreement was executed. Grenny, however, breached the parties’
agreement by failing to deliver possession of the leased premises after accepting
Abrams’s cash payment of the security deposit and first month’s rent. Therefore,
Abrams is entitled to a complete refund of the $1,780 that he paid to Grenny for the
security deposit and first month’s rent.
{¶17} Accordingly, we reverse the trial court’s judgment and remand the case to
the trial court to enter judgment in favor of Abrams in the amount of $1,780.
It is ordered that appellant recover of appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the Garfield Heights Municipal 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.
EILEEN T. GALLAGHER, JUDGE
TIM McCORMACK, P.J., and
FRANK D. CELEBREZZE, JR., J., CONCUR