Elevation Ents., Ltd. v. NMRD, Ltd. ( 2023 )

[Cite as Elevation Ents., Ltd. v. NMRD, Ltd., 2023-Ohio-4433.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Elevation Enterprises Limited, :
No. 22AP-105
Plaintiff-Appellant, : (C.P.C. No. 19CV-0274)
v. : (REGULAR CALENDAR)
NMRD Limited, et al., :
Defendants-Appellees. :
D E C I S I O N
Rendered on December 7, 2023
On brief: Sikora Law LLC, Michael J. Sikora III, and
George H. Carr for Elevation Enterprises Limited.
Argued: George H. Carr.
On brief: Brennan Manna & Diamond, LLC, Hayley E. Kick,
and David M. Scott for NMRD Limited Ltd.
Argued: David M. Scott.
On brief: Kevin E. Humphreys for Sheila D. Trautner
Argued: Kevin E. Humphreys.
APPEAL from the Franklin County Court of Common Pleas
MENTEL, J.
{¶ 1} Plaintiff-appellant, Elevation Enterprises Limited (“Elevation”), appeals
from a January 20, 2022 judgment entry finding in favor of Elevation against defendant-
appellee, NMRD Limited. (“NMRD”), for breach of a listing agreement in the amount of
$102,999.56. The trial court awarded $30,899.87 of said funds directly to Sheila D.
Trautner (“Trautner”). For the reasons that follow, we reverse.
No. 22AP-105 2
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} This case concerns a dispute over a brokerage commission originating out of
a real estate listing agreement.
{¶ 3} On March 15, 2017, Elevation, a commercial realty firm, and NMRD, a limited
company that is the owner of real property located at 1690 Morse Road, Columbus Ohio
(“Premises”), entered into an exclusive authorization to lease agreement (“listing
agreement”). Per the terms of the listing agreement, Elevation was given exclusive
authorization to offer the Premises for lease. The listing agreement provided that if
Elevation leased the Premises without cooperation from an outside broker, it was entitled
to the following:
[C]ommission shall be five percent (5%) of the total net
leasehold payments for the first five years of the initial Lease
term and four percent (4%) for the remaining period of the
initial lease term. Net leasehold payments being the total of all
lease payments for the leasehold term executed between
[NMRD] and such Lessee, 1/2 payable to [Elevation] upon
execution of said leasehold, 1/2 payable upon lease
commencement.
(Feb. 7, 2019 Am. Compl., Ex. B, Exclusive Authorization To Lease Agreement at 1.)
{¶ 4} The listing agreement went on to state that Elevation had the exclusive right
to advertise the Premises for lease, and that it may make diligent efforts to lease the
Premises in such a manner it deems advisable. Relevant to the instant case, the agreement
also provided that the “[c]ommission shall not be paid for amortized improvements.” Id.{¶ 5} Elevation ultimately procured HomeBuys LLC (“HomeBuys”) as a lessee for
the Premises. While the lease was negotiated, Trautner was employed by Elevation as a
real estate salesperson. Trautner was involved in securing HomeBuys as a lessee for the
Premises. In August 2018, it was discovered that HomeBuys’ intended use of the Premises
included the sale of alcohol, which would violate a prior use restriction imposed by non-
party, The Kroger Company (“Kroger”). It is undisputed that Kroger agreed to a partial
release of the restriction in exchange for $100,000. On September 14, 2018, HomeBuys
and NMRD entered into a final lease agreement (“lease agreement”) of the Premises. The
lease agreement provided for an initial term of ten years—a base rent of $321,484.80 for
years one through five then $352,879.80 for years six through ten. Per section 10.5 of the
No. 22AP-105 3
lease agreement, NMRD agreed to pay HomeBuys no more than $458,952 for tenant
improvements at the Premises.
{¶ 6} On November 1, 2018, Elevation issued its commission invoice in connection
with the lease agreement to NMRD. The parties disputed whether Elevation had agreed to
reduce its commission by $25,000 as contribution to the $100,000 payment to Kroger for
waiver of the use restriction. A dispute would later arise concerning whether section 10.5
of the lease agreement constituted an amortized improvement, thereby removing it from
the calculation of the commission. NMRD conceded that it refused to pay any portion of
Elevation’s commission during this period. On December 17, 2018, Elevation recorded a
broker’s lien against the Premises. On or about this same time, Elevation dissociated
Trautner from the brokerage.
{¶ 7} On January 11, 2019, Elevation filed a complaint alleging causes of action for
various forms of breach of contract, unjust enrichment, and foreclosure of commercial
broker lien seeking damages and/or foreclosure of its statutory lien. An amended
complaint was filed on February 7, 2019. Elevation alleged that it was entitled to $150,947
in commission plus attorney fees, costs as provided in R.C. 1311.88(C), and any other relief
that the trial court deems just or appropriate.
{¶ 8} On February 21, 2019, NMRD filed an answer and counterclaim seeking
declaratory judgment from the court as to the amortization and contract modification
issues. On February 22, 2019, Elevation moved that NMRD deposit funds in escrow
representing the commission that was due to Elevation under the listing agreement, which
the trial court granted on March 18, 2019. The trial court granted a subsequent agreed
motion to adjust the amount of NMRD’s funds to be deposited and held in escrow on
September 17, 2019. The additional deposit held in escrow was provided by NMRD to the
clerk of courts on September 27, 2019.1 The total deposit of $211,500 signified one and
one-half times the amount claimed due in Elevation’s affidavit for a commercial broker’s
lien recorded with the Franklin County Recorder’s Office per Instrument No.
1 The initial complaint and amended complaint named WesBanco Bank, Inc., HomeBuys, and Franklin
County Treasurer as defendants as they may claim an interest in the Premises. On September 9, 2020,
Elevation dismissed without prejudice all claims against WesBanco Bank, Inc. and HomeBuys pursuant to
Civ.R. 41(A)(1)(b).
No. 22AP-105 4
201812170170298. The trial court, guided by R.C. 1311.92, ordered the release of the
broker’s lien on September 27, 2019. (Jan. 20, 2022 Findings & Jgmt. Entry.)
{¶ 9} On May 27, 2021, Elevation moved for summary judgment. Elevation argued
that there was no dispute of fact that a contract was in place between the parties, and NMRD
had refused to pay on the commission in connection with the lease agreement. Elevation
also argued that as a matter of law the tenant improvement allowance in the lease
agreement was not an amortized improvement. Finally, Elevation argued that there was
no dispute of material fact that it did not verbally agree to reduce its commission by
$25,000 of its commission as part of the $100,000 payment to Kroger for waiver of the use
restriction on the Premises. Alternatively, Elevation contended that as a matter of law the
alleged oral modification was not valid as there was no new and distinct consideration. On
June 24, 2021, NMRD filed a memorandum in opposition contending that there was a
genuine issue of material fact as to the amortized improvements and alleged contract
modification, which warranted the denial of Elevation’s motion for summary judgment. A
reply brief was filed on August 18, 2021.
{¶ 10} On June 9, 2021, Trautner filed a motion for leave to intervene in the case or
be joined as a defendant instanter. Trautner alleged that based on her work as salesperson
involved in the procurement of HomeBuys as a lessee, she was entitled to a percentage of
Elevation’s commission. Trautner never filed a claim against Elevation but asserted that
she had an interest in the funds held in escrow. On September 3, 2021, the trial court
granted the motion, over Elevation’s objection, finding that pursuant to Civ.R. 24(A),
intervention was appropriate.
{¶ 11} On October 6, 2021, the trial court granted partial summary judgment in
favor of Elevation finding there was no genuine issue of material fact that a contract was in
place between Elevation and NMRD. The trial court concluded that there was no dispute
that Elevation performed the work as stated in the listing agreement, and NMRD was in
breach of the agreement when it failed to pay any portion of the commission. The trial court
also found there was no reasonable dispute of fact that the commission should not be paid
on the tenant improvement allowance. The trial court, however, found there was a dispute
of material fact as to whether Elevation agreed to a reduction in the commission in the
No. 22AP-105 5
amount of $25,000. The trial court set the matter for trial on the sole issue of damages and
attorney fees under R.C. 1311.88.
{¶ 12} A bench trial in this matter commenced on November 22, 2021. Prior to the
start of trial, Elevation filed a notice of dismissal, pursuant to Civ.R. 41(A), to remove
Trautner from the proceedings. The trial court, over the objection of Elevation, permitted
Trautner to participate in the trial based on her interest in the commission funds held in
escrow. The parties filed closing briefs on December 7, 2021.
{¶ 13} On January 20, 2022, the trial court issued a final judgment entry in this case.
The trial court concluded that the tenant improvement allowance in the lease agreement
constituted amortized improvements, which it held should be excluded from the calculation
of Elevation’s commission under the listing agreement. (Jan. 20, 2022 Findings & Jgmt.
Entry at ¶ 11.) The trial court also found that based on the testimony at trial, Elevation
agreed to a $25,000 reduction in its commission. Finally, the trial court held, “Elevation
agreed to split any commission it received with its licensed real estate salesperson, Sheila
Trautner. According to their agreement, Ms. Trautner was to receive thirty (30%) of the
commission and Elevation seventy percent (70%).” Id. at ¶ 13.
{¶ 14} The trial court entered judgment in favor of Elevation and against NMRD for
breach of the listing agreement and awarded Elevation $102,999.56. However, the trial
court awarded $30,899.87 of said funds directly to Trautner. The trial court denied
Elevation’s request for attorney fees explaining that, in addition to the lack of a fee shifting
provision in the listing agreement or evidence that the parties acted in bad faith, there was
no statutory basis under R.C. 1311.88 for such an award. The trial court wrote, “Elevation’s
broker lien enforcement claim was extinguished upon the payment of the deposit to the
clerk of courts. Thus, any right to attorney fees under R.C. 1311.88 was also extinguished.”
Id. at ¶ 17. The trial court’s decision was silent as to any determination regarding
prejudgment interest.
{¶ 15} Elevation filed a timely appeal.
II. ASSIGNMENTS OF ERROR
{¶ 16} Elevation assigns the following as trial court error:
[I.] The Trial Court erred by declaring that the Listing
Agreement between Elevation and NMRD was verbally
No. 22AP-105 6
amended, because NMRD provided no “new and distinct”
consideration for such an amendment.
[II.] The Trial Court erred by subtracting the “Tenant
Improvement Allowance” in the HomeBuys Lease from the
total amount on which Elevation’s commission was due,
because the Listing Agreement only permitted subtraction of
“amortized improvements,” and the HomeBuys “Tenant
Improvement Allowance” was not amortized.
[III.] The Trial Court erred by awarding a portion of Elevation’s
commission directly to non-party Sheila Trautner, despite her
failure to assert any such claim against Elevation or NMRD, her
voluntary dismissal before trial, and the statutory prohibition
against such awards in R.C. § 4735.21.
[IV.] The Trial Court erred by failing to include pre-judgment
interest in Elevation’s final award, in violation of R.C. §§
1343.03(A) and 1311.88.
[V.] The Trial Court erred by failing to include attorneys’ fees
in Elevation’s final award, in violation of R.C. § 1311.88.
III. LEGAL ANALYSIS
A. Appellant’s First Assignment of Error
{¶ 17} In Elevation’s first assignment of error, it alleges that the trial court erred by
determining that the listing agreement between Elevation and NMRD was verbally
amended. Elevation contends, as a matter of law, the written contract could not be orally
modified as there was no new and distinct consideration.
{¶ 18} In civil appeals from a bench trial, we generally review assignments of error
under a manifest weight of the evidence standard. 3637 Green Rd. Co. v. Specialized
Component Sales Co., 8th Dist. No. 103599, 2016-Ohio-5324, ¶ 19, citing Seasons Coal v.
Cleveland, 10 Ohio St.3d 77, 79-80 (1984). In such cases, we operate under the
presumption that the trial court’s findings are correct. Id. “ ‘A reviewing court should be
guided by a presumption that the findings of a trial court are correct, since the trial judge is
best able to view the witnesses and observe their demeanor, gestures and voice inflections,
and use their observations in weighing credibility of the proffered testimony.’ ” Daily
Servs., LLC v. Transglobal, Inc., 10th Dist. No. 22AP-656, 2023-Ohio-2462, ¶ 48, quoting
Phu Ta v. Chaudhry, 10th Dist. No. 15AP-867, 2016-Ohio-4944, ¶ 17-18. Unless the
No. 22AP-105 7
judgment lacks some competent, credible evidence that goes towards the material elements
of the case, we will not reverse under a manifest weight of the evidence review. 3637 Green
Rd. Co. at ¶ 19, citing C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279, (1978),
syllabus.
{¶ 19} However, the question of the existence of a contract presents a mixed
question of law and fact. Daily Servs., LLC at ¶ 48. A reviewing court will accept the facts
as determined by the trial court if based on some competent, credible evidence but resolve
application of the law to the facts de novo. While the question of whether the parties intend
to be bound is a question of fact, reviewed for whether they are supported by some
competent, credible evidence, questions of law concerning the existence and interpretation
of a contract are reviewed de novo. Phu Ta at ¶ 18, citing Continental W. Condominium
Unit Owners Assn. v. Howard E. Ferguson Inc., 74 Ohio St.3d 501, 502 (1995); Nexus
Communication, Inc. v. Qwest Communication, Corp., 193 Ohio App.3d 599, 2011-Ohio-
1759 (10th Dist.); see also Greenzalis v. Nationwide Mut. Ins. Co., 10th Dist. No. 16AP-139,
2016-Ohio-8344, ¶ 23, citing Hanna v. Groom, 10th Dist. No. 07AP-502, 2008-Ohio-765,
¶ 14, 16 (finding the question of whether a contract exists and interpretation of that contract
is a question of law). Whether an oral modification to a written agreement is based on new
and distinct consideration is a question of law, which we review de novo. Aerel, S.R.L. v.
PCC Airfoils, L.L.C., 448 F.3d 899, 909-10 (6th Cir.2006). “De novo” review means the
court of appeals provides an independent review of the record and affords no deference to
the trial court’s decision. Gabriel v. Ohio State Univ. Med. Ctr., 10th Dist. No. 14AP-870,
2015-Ohio-2661, ¶ 12, citing Byrd v. Arbors E. Subacute & Rehab. Ctr., 10th Dist. No. 14AP-
232, 2014-Ohio-3935, ¶ 5.
{¶ 20} A contract is “ ‘[a] promise or a set of promises for the breach of which the
law gives a remedy, or the performance of which the law in some way recognizes as a duty.’ ”
Daily Servs., LLC at ¶ 44, quoting Episcopal Retirement Homes, Inc. v. Ohio Dept. of
Indus. Relations, 61 Ohio St.3d 366, 369 (1991). Formation of a contract requires an offer,
acceptance, consideration, and mutual assent of the parties with legal capacity. Daily
Servs., LLC at ¶ 44, citing Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, ¶ 16, citing
Perlmuter Printing Co. v. Strome, Inc., 436 F.Supp. 409, 414 (N.D.Ohio 1976). Parties may
vary or modify the terms of initial agreement in any manner. Cor-Ben Consultants, Inc. v.
No. 22AP-105 8
Cor-Ben Consultants Agency, Inc., Franklin C.P. No. 14 CV 005197, ¶ 14-15 (Sept. 3, 2015).
However, a contract cannot be unilaterally modified by a party as any modification must be
mutually agreed upon by the contracted parties. Bluemile, Inc. v. Atlas Indus. Contrs., Ltd.,
10th Dist. No. 16AP-789, 2017-Ohio-9196, ¶ 14, citing Hanna at ¶ 27. Where a written
contract is altered or modified by oral agreement, new and distinct consideration is
required, or “it must be a valid and binding contract itself, resting upon some new and
distinct consideration.” Wells Fargo Bank, N.A. v. Baldwin, 12th Dist. No. CA2011-12-227,
2012-Ohio-3424, ¶ 14, citing Thurston v. Ludwig, 6 Ohio St. 1 (1856), at syllabus; Hanna
at ¶ 28.
{¶ 21} Consideration is defined as a bargained for legal benefit and/or detriment.
Marchbanks v. Ice House Ventures, __Ohio St.3d__, 2023-Ohio-1866, ¶ 13, citing
Kostelnik at ¶ 16. “ ‘Absent fraud or unconscionability, the adequacy of consideration is not
a proper subject for judicial scrutiny.’ ” Gatling Ohio, LLC v. Allegheny Energy Supply Co.,
LLC, 10th Dist. No. 17AP-188, 2018-Ohio-3636, ¶ 20, quoting Apfel v. Prudential-Bache
Sec., Inc., 81 N.Y.2d 470, 476 (1993). Even in cases where the exchange is grossly unequal
or of uncertain value, it may constitute valid consideration. Id.{¶ 22} Here, Elevation entered into the March 15, 2017 listing agreement with
NMRD for the exclusive right to procure a lessee for the Premises. Once a lessee was
obtained, Elevation would earn a “commission [of] five percent (5%) of the total net
leasehold payments for the first five years of the initial Lease term and four percent (4%)
for the remaining period of the initial lease term.” (Feb. 7, 2019 Am. Compl., Ex. B,
Exclusive Authorization To Lease Agreement at 1.) NMRD contends that Elevation agreed
to an oral medication of the written agreement forfeiting $25,000 of its commission as
contribution to Kroger for waiver of the use restriction. Per the terms of the listing
agreement, however, NMRD had already promised to pay Elevation its commission
following the procurement of a lessee for the Premises. “[A]n oral agreement to modify a
prior written agreement must be founded on a new consideration that is distinct from the
consideration supporting the prior agreement; it cannot be supported on the supposition
that it is founded on the continuation or extension of the consideration of the prior written
contract that is complete in itself.” Ihenacho v. Ohio Inst. of Photography & Technology,
2d Dist. No. 24191, 2011-Ohio-3730, ¶ 50, citing 17 Ohio Jurisprudence 3d, Contracts,
No. 22AP-105 9
Section 41, at 390 (2008). Therefore, even assuming the parties mutually agreed to modify
the listing agreement, NMRD’s promise to pay the commission, minus $25,000, cannot be
a bargained-for-detriment and fails to qualify as valid new and distinct consideration to
support the contract modification. Hanna at ¶ 39.
{¶ 23} NMRD contends that the consideration for the modification of the listing
agreement was to facilitate the completion of the lease agreement. NMRD posits that the
lease agreement with HomeBuys would not have occurred absent the waiver of $25,000 by
Elevation. However, no lease agreement was in place at the time of the alleged oral
modification. The telephone conversations at issue predated the execution of the
September 14, 2018 agreement. As such, NMRD asked Elevation for a reduction in the
commission to do what it was already bound to do prior to the modification. Again, a pre-
existing right to compensation is not new and distinct consideration. “A promise to do what
the promisor is already bound to do cannot be a consideration, for, if a person gets nothing
in return for his promise but that to which he is already legally entitled, ‘the consideration
is unreal.’ ” Baldwin at ¶ 16, quoting Shannon v. Universal Mtge. & Discount Co., 116 Ohio
St. 609, 621 (1927). Additional consideration has been previously identified, but is not
limited to: late fees, attorney fees, costs, and additional interest. Cor-Ben Consultants at
¶ 22-24. Here, no such consideration was provided. Aerel, S.R.L. at 909-10 (finding the
alleged oral modification to a written contract by the manufacturer to pay the disputed
commission failed as a matter of law as it was not supported by new and distinct
consideration).
{¶ 24} NMRD cites the September 14, 2018 “Agreement Relative to Restrictions”
between NMRD and HomeBuys as evidence of the understanding of the parties to the
modification. However, the document does not include Elevation as a signatory to the
agreement. (Dec. 3, 2021 NMRD Trial Ex. 5.) Accordingly, even if the parties mutually
agreed to the modification of the listing agreement, as a matter of law, the modification
lacked new and distinct consideration to support the oral modification. Upon remand, the
trial court is instructed to recalculate the commission to include the $25,000 that was
excluded from the original entry.
{¶ 25} Elevation’s first assignment of error is sustained.
No. 22AP-105 10
B. Appellant’s Second Assignment of Error
{¶ 26} In Elevation’s second assignment of error, Elevation argues that the trial
court erred by excluding the tenant improvement allowance in the lease agreement from
the total amount on which its commission was due. Specifically, Elevation claims that the
trial court erred as the listing agreement only permitted subtraction of “amortized
improvements” from the commission and, as a matter of law, HomeBuys’ “tenant
improvement allowance” was not amortized.
{¶ 27} As set forth previously, construction and interpretation of a written contract
is a question of law, which we review de novo. J. Griffin Ricker Assocs., LLC v. Well, 10th
Dist. No. 21AP-29, 2022-Ohio-1470, ¶ 21, citing Alexander v. Buckeye Pipe Line Co., 53
Ohio St.2d 241 (1978), paragraph one of the syllabus.
{¶ 28} Judicial review of a contract “ ‘begins with the fundamental objective of
ascertaining and giving effect to the intent of the parties at the time they executed the
agreement. * * * When a contract is not ambiguous, it must be enforced as written.’ ”
Campbell v. 1 Spring, LLC, 10th Dist. No. 19AP-368, 2020-Ohio-3190, ¶ 5, quoting
CosmetiCredit, LLC v. World Fin. Network Natl. Bank, 10th Dist. No. 14AP-32, 2014-Ohio-
5301, ¶ 13-14. Contractual interpretation begins with the four corners of the agreement.
Campbell at ¶ 6, citing Drs. Kristal & Forche, D.D.S., Inc. v. Erkis, 10th Dist. No. 09AP-06,
2009-Ohio-5671, ¶ 21. When the term of a contract is clear and unambiguous, the court
may not consider evidence outside the agreement to discern its meaning. Id. However, in
cases when the contractual language is ambiguous, or when circumstances in the contract
gives the plain language special meaning, extrinsic evidence is used to determine the intent
of the parties. Id. A reviewing court cannot in effect create a new agreement by finding an
intent not expressed in the plain language of the contract. Vandercar v. Port of Greater
Cincinnati Dev. Auth, 1st Dist. No. C-210643, 2022-Ohio-3148, ¶ 26, citing Alexander at
246.
{¶ 29} When a reviewing court is tasked with interpreting a contract, it must give
words or phrases appearing in the agreement their ordinary meaning unless it creates a
manifestly absurd result “ ‘or unless some other meaning is clearly evidenced from the face
or overall contents of the instrument.’ ” Sutton Bank v. Progressive Polymers, L.L.C., 161
Ohio St.3d 387, 2020-Ohio-5101, ¶ 15, quoting Alexander at paragraph two of the syllabus.
No. 22AP-105 11
Similarly, “technical terms are given their technical meaning ‘unless a different intention is
clearly expressed.’ ” Sutton Bank at ¶ 15, quoting Foster Wheeler Enviresponse v. Franklin
Cty. Convention Facilities Auth., 78 Ohio St.3d 353, 361 (1997).
{¶ 30} The listing agreement provides that the “[c]ommission shall not be paid for
amortized improvements.” (Feb. 7, 2019 Am. Compl., Ex. B, Exclusive Authorization To
Lease Agreement at 1.) The phrase “amortized improvements” is not defined in the listing
agreement. In cases where a word or phrase is not defined in the agreement, courts utilize
dictionary definitions of the term to determine their ordinary meaning. Vandercar at ¶ 26,
citing Alexander 247-48. “[A]mortization” is a common legal term defined in Black’s Law
Dictionary 103 (10th Ed.2014) as “[t]he act or result of gradually extinguishing a debt, such
as a mortgage, usu. By contributing payments of principal each time a periodic interest
payment is due.”2 See also Black’s Law Dictionary 103 (10th Ed.2014) “amortization
schedule” as “[a] schedule of periodic payments of interest and principal owed on a debt
obligation; spec., a loan schedule showing both the amount of principal and interest that is
due at regular intervals over the loan term and the remaining unpaid principal balance after
each scheduled payment is made.”
{¶ 31} Giving these terms their ordinary meaning, we cannot find that the “tenant
improvement allowance” constitutes an “amortized improvement” as contemplated under
the listing agreement. A careful reading of section 10.5 of the lease agreement reveals that
NMRD agreed to pay HomeBuys no more than $458,952 for tenant improvements at the
Premises. The lease agreement notes that payment of the tenant improvement allowance
would be made over four installment payments and required documentation of invoices
and original, recordable lien waivers from each material man and laborer for whom
HomeBuys sought reimbursement. However, the plain language of the lease agreement
lacks any indication that these improvements were considered “amortized” as there is no
mention in the agreement of amortization, an amortization calculation, or discussion of
interest on the payments. It is the duty of this court to give effect to the terms the parties
employed in the agreement, and “ ‘not to delete words used or to insert words not used.’ ”
2 Merriam-Webster Dictionary offers a similar definition of “amortize” as “to pay off (an obligation, such as a
mortgage) gradually usually by periodic payments of principal and interest or by payments to a sinking fund.”
Merriam-Webster Dictionary, “amortize,” https://www.merriam-webster.com/ dictionary/amortizing
(accessed December 7, 2023).
No. 22AP-105 12
(Emphasis sic.) DiMarco v. Shay, 154 Ohio App.3d 141, 2003-Ohio-4685, ¶ 22 (10th Dist.),
quoting Cleveland Elec. Illum. Co. v. Cleveland, 37 Ohio St.3d 50, 53 (1988).
{¶ 32} NMRD contends that the amortization was “bak[ed]” into the contract.
(NMRD’s Brief at 16-17.) NMRD cites the trial testimony of Mo Dioun, special manager for
NMRD, that “[NMRD] amortize[d] that over a 10-year period, our cost of funds, plus
another percent or two to cover that risk, that’s part of doing business.” (Nov. 22, 2021 Tr.
at 134.)
{¶ 33} The meaning of a written contract is ascertained through the language of the
document and there can be no intendment or implication that is inconsistent with the plain
language of the agreement. Phillips v. May, 11th Dist. No. 2003-G-2520, 2004-Ohio-5942,
¶ 28, citing Blosser v. Enderlin, 113 Ohio St. 121 (1925), paragraph one of the syllabus; Kelly
v. Med. Life Ins. Co., 31 Ohio St.3d 130 (1987), paragraph one of the syllabus. “ ‘[T]he
relevant inquiry is the manifestation of intent of the parties as seen through the eyes of a
reasonable observer, rather than the subjective intention of the parties.’ ” (Emphasis
added.) Daily Servs., LLC, 2023-Ohio-2462, at ¶ 47, quoting Beneficial, Inc. v. Bolen, 10th
Dist. No. 94APE08-1202, 1995 Ohio App. LEXIS 2736, *10 (June 29, 1995). Dioun’s vague
testimony as to the terms of the amortization, which are absent from the agreement,
underscores this problem. The subjective intent of NMRD is irrelevant as no reasonable
observer would believe that the parties intended the tenant improvement allowance to
constitute an amortized improvement. As such, NMRD’s argument that the rate of
amortization is “baked” into the agreement, without any evidence in the lease agreement,
is not a reasonable interpretation of the term “amortize.” While the trial court made
findings of fact concerning the credibility of the witnesses, we need not reach that issue as
the contractual language is clear.
{¶ 34} Therefore, the trial court erred, as a matter of law, in its determination that
the “tenant improvement allowance” in the lease agreement fell under the listing
agreement’s definition of “amortized improvements.” Upon remand, the trial court is
instructed to recalculate Elevation’s commission to include HomeBuys’ tenant
improvement allowance.
{¶ 35} Elevation’s second assignment of error is sustained.
No. 22AP-105 13
C. Appellant’s Third Assignment of Error
{¶ 36} In Elevation’s third assignment of error, Elevation argues that the trial court
erred by awarding a portion of its commission directly to Trautner.
{¶ 37} Before we can consider Elevation’s third assignment of error, we must
address the procedural defect in its brief. Elevation’s argument as to its third assignment
of error is broken into two parts: (1) that the trial court erred in allowing Trautner to
intervene and (2) the trial court erred in awarding damages directly to Trautner.
Elevation’s third assignment of error, however, only concerns the second argument and
makes no references to the trial court’s grant of intervention. Moreover, Elevation’s
arguments are derived from two separate entries. The first argument is based on the trial
court’s grant of intervention in its September 3, 2021 entry; the second argument concerns
the January 20, 2022 entry awarding Trautner a distribution from the escrow account.
Therefore, Elevation has improperly inserted an additional argument that is not attached
to an identified assignment of error.
{¶ 38} As provided in App.R. 12(A)(1)(b), a reviewing court must “[d]etermine [an]
appeal on its merits on the assignments of error set forth in the briefs under App.R. 16.”
“ ‘[T]his court rules on assignments of error only, and will not address mere arguments.’ ”
Rider v. Dir. Ohio Dept. of Job & Family Servs. 10th Dist. No. 16AP-854, 2017-Ohio-8716,
¶ 7, quoting Ellinger v. Ho, 10th Dist. No. 08AP-1079, 2010-Ohio-553, ¶ 70, citing In re
Estate of Taris, 10th Dist. No. 04AP-1264, 2005-Ohio-1516, ¶ 5. Because Elevation’s
argument concerning the trial court’s alleged error in granting intervention was not
asserted in its third assignment of error, we decline to address it. State v. Dixon, 10th Dist.
No. 17AP-884, 2018-Ohio-3759, ¶ 5, citing Bonn v. Bonn, 10th Dist. No. 12AP-1047, 2013-
Ohio-2313, ¶ 9 (“[w]e will address each assignment of error as written and disregard any
superfluous arguments not raised by the actual assignment of error under review”); Blevins
v. Blevins, 10th Dist. No. 14AP-175, 2014-Ohio-3933, ¶ 12. Accordingly, Elevation’s
extraneous argument concerning the trial court’s decision to permit Trautner to intervene
in the case is not properly asserted and, therefore, will be disregarded on appeal.
App.R. 16(A)(7); 12(A)(2). Instead, we will focus our analysis on whether the trial court
erred in awarding funds directly to Trautner in the January 20, 2022 judgment entry.
{¶ 39} Pursuant to R.C. 4735.21:
No. 22AP-105 14
No real estate salesperson or foreign real estate salesperson
shall collect any money in connection with any real estate or
foreign real estate brokerage transaction, whether as a
commission, deposit, payment, rental, or otherwise, except in
the name of and with the consent of the licensed real estate
broker or licensed foreign real estate dealer under whom the
salesperson is licensed at the time the sales person earned the
commission.
{¶ 40} Upon review, the plain language of R.C. 4735.21 provides that Trautner
cannot directly receive any money in connection with a real estate brokerage transaction
unless it is “in the name of and with the consent of the licensed real estate broker * * * under
whom the salesperson is licensed at the time the sales person earned the commission.”
Here, there is no dispute that the trial court awarded funds directly to Trautner that were
not “in the name of and with the consent of the licensed real estate broker,” Elevation. The
trial court, therefore, erred by awarding a portion of the commission directly to Trautner in
its final judgment entry.
{¶ 41} Trautner contends that R.C. 1311.92(A) controls in this case as the statute
provides, “[t]he moneys shall be held in escrow and shall only be released as ordered by a
court of competent jurisdiction, or as directed by agreement of the broker and owner or by
any process agreed to by the broker and owner.”
{¶ 42} When two statutes are purportedly in conflict, R.C. 1.51 instructs the
reviewing court to construe them, if possible, to give effect to both statutes. State ex rel.
Data Trace Information Servs., L.L.C., v. Cuyahoga Cty. Fiscal Officer, 131 Ohio St.3d 255,
2012-Ohio-753, ¶ 48, citing Gahanna-Jefferson Local School Dist. Bd. of Edn. v. Zaino, 93
Ohio St.3d 231, 234 (2001). “Only where the conflict is deemed irreconcilable does R.C.
1.51 mandate that one provision shall prevail over the other.” (Emphasis sic.) Id. at ¶ 48,
citing United Tel. Co. of Ohio v. Limbach, 71 Ohio St.3d 369, 372 (1994).
{¶ 43} Here, R.C. 4735.21, amended September 29, 2011, is a specific provision
concerning limitations of real estate salespersons collecting funds in a real estate brokerage
transaction. Conversely, R.C. 1311.92, enacted on August 28, 1997, is a general provision
regarding the establishment of an escrow account to enable a transfer of lien property to
close when a broker’s perfected lien may otherwise prevent the closing. Given the
particularity and more recent amendment of R.C. 4735.21, we conclude the legislature
No. 22AP-105 15
intended R.C. 4735.21 to control in this instance. Trautner’s interpretation would frustrate
the function of R.C. 4735.21 as it would create a work around to allow for salespersons to
seek payment outside the broker provided that those funds are held in escrow.
{¶ 44} To be sure, Trautner has succeeded in protecting her interest in the
commission. While Trautner’s failure to assert a cause of action does not necessarily
prevent subsequent litigation of this issue, it does complicate the question upon remand as
to how the trial court should resolve distribution of the remaining funds. Because we have
concluded that the trial court erred in directly awarding Trautner funds from the escrow
account, we decline to address Elevation’s alternative arguments. Upon remand, the trial
court is instructed to resolve whether Trautner must bring a separate cause of action to
procure these funds. If not, the trial court should conduct a damages hearing in order to
consider what, if any, percentage of funds that Trautner is entitled to based on her work to
secure the lease agreement.
{¶ 45} Elevation’s third assignment of error is sustained.
D. Appellant’s Fourth Assignment of Error
{¶ 46} In Elevation’s fourth assignment of error, it argues that the trial court erred
by failing to include prejudgment interest in its final award in violation of R.C. 1343.03(A)
and 1311.88(C). A reviewing court will not reverse the trial court’s award or denial of
prejudgment interest absent an abuse of discretion. MNM & MAK Ent., LLC v. HIIT Fit
Club, LLC, 10th Dist. No. 18AP-980, 2019-Ohio-4017, ¶ 14.
{¶ 47} After a review of the January 20, 2022 judgment entry, we conclude that the
trial court failed to address prejudgment interest despite Elevation’s request for it to make
such an award in the amended complaint as well as various stages of the litigation. “ ‘Where
a trial court’s judgment is not sufficiently detailed, a reviewing court may be left in the
unfortunate position of being unable to provide meaningful review.’ ” Ocwen Loan
Servicing, LLC v. McBenttes, 9th Dist. No. 29343, 2019-Ohio-4884, ¶ 8, quoting Zemla v.
Zemla, 9th Dist. No. 11CA0010, 2012-Ohio-2829, ¶ 19; Lynda Hughes Dawson Lumber,
Inc. v. Hummel, 2d Dist. No. 09-CA-07, 2010-Ohio-4918, ¶ 3 (remanding the case back to
the trial court as the prior decision failed to address the issue of prejudgment interest).
{¶ 48} Accordingly, we reverse the judgment of the trial court to the extent that it
failed to address the subject prejudgment interest. Wilmoth v. Akron Metro. Hous. Auth.,
No. 22AP-105 16
9th Dist. No. 27746, 2016-Ohio-3441, ¶ 25 (“when the trial court fails to address a claim in
the first instance, we are left with no choice but to reverse the judgment and remand the
matter for the trial court to address it”). This issue is remanded back to the trial court to
consider whether Elevation is entitled to prejudgment interest in its final award under
R.C. 1311.88 or 1343.03.
{¶ 49} Elevation’s fourth assignment of error is sustained.
E. Appellant’s Fifth Assignment of Error
{¶ 50} In Elevation’s fifth assignment of error, it argues that the trial court erred by
failing to award attorney fees in its final judgment entry.
{¶ 51} Ohio follows the “American Rule” with respect to the recovery of attorney
fees. The “American Rule” dates back to eighteenth century common law and generally
requires each party in litigation to pay their own attorney fees. Pasco v. State Auto. Mut.
Ins. Co., 10th Dist. No. 04AP-696, 2005-Ohio-2387, ¶ 9, citing Sorin v. Bd. of Edn., 46 Ohio
St.2d 177, 179 (1976); Cruz v. English Nanny & Governess School, 169 Ohio St.3d 716,
2022-Ohio-3586, ¶ 35, citing Baker Botts, L.L.P. v. ASARCO, L.L.C., 576 U.S. 121, 126
(2015), citing Arcambel v. Wiseman, 3 U.S. 306 (1796). The Supreme Court of Ohio has
explained, “ ‘[t]he rationale behind the American rule is that because “litigation is at best
uncertain one should not be penalized for merely defending or prosecuting a lawsuit, and
that the poor might be unjustly discouraged from instituting actions to vindicate their rights
if the penalty for losing included the fees of their opponents’ counsel.” ’ ” Cruz at ¶ 35,
quoting Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967).
{¶ 52} While attorney fees are typically not recoverable in contract disputes, see,
e.g., First Bank of Marietta v. L.C. Ltd., 10th Dist. No. 99AP-304, 1999 Ohio App. LEXIS
6504 (Dec. 28, 1999), there are several allowed exceptions. Cleveland Constr., Inc. v.
Ruscilli Constr. Co., 10th Dist. No. 18AP-480, 2023-Ohio-363, ¶ 25, citing Orth v. State,
10th Dist. No. 14AP-937, 2015-Ohio-3977, ¶ 12. Recovery of attorney fees is permitted in
cases where “[1] a statute authoriz[es] attorney fees, [2] a finding of bad faith conduct by
one party, or [3] a fee-shifting provision in the parties’ agreement.” Id.{¶ 53} This court will generally review the trial court’s determination concerning
attorney fees for an abuse of discretion. Pasco at ¶ 9, citing Motorists Mut. Ins. Co. v.
Brandenburg, 72 Ohio St.3d 157, 160 (1995). In this case, however, the trial court denied
No. 22AP-105 17
Elevation attorney fees based on the finding that “[t]here [was] no statutory authority” to
award attorney fees because “Elevation’s broker lien enforcement claim was extinguished
upon the payment of the deposit to the clerk of courts,” which the trial court found
extinguished “any right to attorney fees under R.C. 1311.88.” (Jan. 22, 2020 Findings &
Jgmt. Entry at 4.) As such, the applicability of a statute is a question of law, which we review
de novo on appeal. TBF Fin. LLC v. Wilkerson, 10th Dist. No. 18AP-974, 2019-Ohio-3493,
¶ 11, citing Broadmoor Ctr., LLC v. Dallin, 10th Dist. No. 16AP-428, 2016-Ohio-8541, ¶ 19
(“[s]tatutory interpretation is a question of law reviewed de novo on appeal.”).
{¶ 54} Preliminarily, we must resolve which iteration of R.C. 1311.88(C) controls.
Prior to March 31, 2021, R.C. 1311.88(C) provided, “[i]n an action based on a broker’s lien,
a court may assess the nonprevailing parties with costs and reasonable attorney’s fees
incurred by the prevailing parties.” Effective March 31, 2021, the amended language of
R.C. 1311.88(C) reads in relevant part: “[i]n an action based on a broker’s lien, a court shall
assess the nonprevailing parties with all costs and reasonable attorney’s fees incurred by
the prevailing parties.” By removing the permissive language of “may” and replacing it with
the mandatory term of “shall,” the General Assembly indicated an intention to remove the
trial court’s discretionary review of whether attorney fees could be assessed against the
nonprevailing party in cases based on a broker’s lien.
{¶ 55} Generally, a statute is presumed to be prospective in its application unless
expressly stated otherwise. R.C. 1.48; Prairie Twp. Bd. of Trustees. v. Ross, 10th Dist. No.
03AP-509, 2004-Ohio-838, ¶ 7, citing Van Fossen v. Babcock & Wilcox Co., 36 Ohio St.3d
100, 105 (1988). The same is true concerning previously enacted statutes as any such
amendment does not affect the prior operation of the statue or any pending proceedings
unless expressly provided. R.C. 158. Thus, a change to a statutory provision has no bearing
on a case already pending before the trial court unless the General Assembly expressly
stated otherwise. In this case, the amendment to R.C. 1311.88 took effect after the initial
complaint was filed on January 11, 2019. Because the most recent amendment to
R.C. 1311.88(C) does not specifically state that it was intended to apply retroactively, the
version of R.C. 1311.88(C) in effect until March 31, 2021 would control.3
3 At oral arguments, counsel for Elevation conceded that the version of R.C. 1311.88(C) in effect until March 31,
2021 would apply under the facts of this case.
No. 22AP-105 18
{¶ 56} The first question is whether Elevation is the “prevailing party” in this case.
In the absence of other applicable statutory definitions, this court has applied the definition
of “prevailing party,” per Black’s Law Dictionary, as “ ‘[a] party in whose favor a judgment
is rendered.’ ” Winona Holdings, Inc. v. Duffey, 10th Dist. No. 13AP-471, 2014-Ohio-519,
¶ 9, quoting Black’s Law Dictionary 1232 (9th Ed.2009); see also Id. at ¶ 9, quoting Hikmet
v. Turkoglu, 10th Dist. No. 08AP-1021, 2009-Ohio-6477, ¶ 74 (defining “prevailing party”
as the party “in whose favor the verdict or decision is rendered and judgment entered.”). A
prevailing party is one that has obtained some relief in the case, even if they did not sustain
all of their claims. Lake Breeze Condominium Homeowners’ Assn. v. Eastlake Ohio
Developers, LLC, 11th Dist. No. 2021-L-124, 2022-Ohio-3002, ¶ 48, citing J.B.H. Props. v.
N.E.S. Corp., 11th Dist. No. 2007-L-24, 2007-Ohio-7116, ¶ 15.
{¶ 57} It appears from the judgment entry that the trial court has implicitly deemed
Elevation the prevailing party. In its discussion of attorney fees, the trial court explained
that the prevailing party is only entitled to attorney fees under limited circumstances then
proceeds to examine, and ultimately reject, Elevation’s claim under those allowed
exceptions. Such an analysis would be unnecessary—if not illogical—had the trial court not
concluded Elevation was the prevailing party. Regardless, we need not defer to the trial
court’s determination as the finding that a plaintiff is the “prevailing party” is subject to a
de novo standard. Simbo Props. v. M8 Realty, L.L.C., 8th Dist. No. 107161, 2019-Ohio-
4361, ¶ 36, citing Thomas v. Cleveland, 176 Ohio App.3d 401, 2008-Ohio-1720 ¶ 23 (8th
Dist.), citing Jenkins by Jenkins v. Missouri, 127 F.3d 709, 713 (8th Cir.1997); Keller v. City
of Cincinnati, 1st Dist. No. C-200024, 2021-Ohio-1420, ¶ 21. Based on the trial court’s
finding that Elevation was entitled to the commission, as well as our conclusion that the
trial court erred in its resolution of the first two assignments of error, there is no doubt that
Elevation was the prevailing party in this action.
{¶ 58} Next, we must consider whether this “action [is] based on a broker’s lien” as
stated in R.C. 1311.88(C). The amended complaint alleges that NMRD breached the listing
agreement by failing to pay the commission for securing HomeBuys as a lessee of the
Premises. On December 17, 2018, Elevation recorded a broker’s lien against the Premises
based on the breach of contract alleged in the complaint. After NMRD deposited funds in
escrow, the trial court, guided by R.C. 1311.92, ordered the release of the broker’s lien on
No. 22AP-105 19
September 27, 2019. Here, the plain language of R.C. 1311.88(C) only requires that the
action be “based on a broker’s lien.” See Nosal v. Szabo, 8th Dist. No. 83975, 2004-Ohio-
4076, ¶ 31-32 (finding that, under the plain language of R.C. 1311.88, “[t]he instant ‘action’
is based, in part, on brokers’ liens that were filed by appellees to preserve their commission
fees and, in part, based on [appellant’s] failure to honor the written agreement to which he
signed to pay those commission fees.”). While NMRD’s payment of the deposit to the clerk
of courts extinguished the broker lien under R.C. 1311.92 as a matter of law, which was
replaced with an equitable lien on the escrow funds, R.C. 1311.88 does not require the lien
to be in place at the time of the award. Therefore, we conclude this matter was based on a
broker’s lien as intended under R.C. 1311.88.
{¶ 59} Because we find that Elevation constitutes the “prevailing party” in this case
and that the matter is “based on a broker’s lien,” the trial court erred, as a matter of law,
finding that attorney fees were not available to Elevation under the statute. Whether the
trial court, in its discretion, elects to award Elevation attorney fees is a separate question
we need not answer at this time. Upon remand, the trial court is instructed to determine
whether Elevation is entitled to attorney fees and, if so, apportion the assessed costs and
attorney fees consistent with R.C. 1311.88(C).
{¶ 60} Elevation’s fifth assignment of error is sustained.
IV. CONCLUSION
{¶ 61} Having sustained Elevation’s first, second, third, fourth, and fifth
assignments of error, we reverse the judgment of the Franklin County Court of Common
Pleas, and remand it back for further proceedings.
Judgment reversed and remanded.
DORRIAN and JAMISON, JJ., concur.
_____________