Cocca Dev. v. Mahoning Cty. Bd. of Commrs. , 2010 Ohio 3166 ( 2010 )


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  • [Cite as Cocca Dev. v. Mahoning Cty. Bd. of Commrs., 
    2010-Ohio-3166
    .]
    STATE OF OHIO, MAHONING COUNTY
    IN THE COURT OF APPEALS
    SEVENTH DISTRICT
    COCCA DEVELOPMENT, LTD.                          )       CASE NO. 08 MA 163
    )
    PLAINTIFF-APPELLANT                      )
    )
    VS.                                              )       OPINION
    )
    MAHONING COUNTY BOARD OF                         )
    COMMISSIONERS                                    )
    )
    DEFENDANT-APPELLEE                       )
    CHARACTER OF PROCEEDINGS:                                Civil Appeal from the Court of Common
    Pleas of Mahoning County, Ohio
    Case No. 07 CV 3005
    JUDGMENT:                                                Reversed and Remanded.
    APPEARANCES:
    For Plaintiff-Appellant:                                 Atty. Mark A. Hutson
    Atty. William A. Myers
    100 DeBartolo Place, Suite 400
    Boardman, Ohio 44512
    For Defendant-Appellee:                                  Atty. Paul J. Gains
    Mahoning County Prosecutor
    Atty. Linette M. Stratford
    Atty. Gina DeGenova Bricker
    Assistant Prosecuting Attorneys
    21 West Boardman Street, 6th Floor
    Youngstown, Ohio 44503
    JUDGES:
    Hon. Cheryl L. Waite
    Hon. Gene Donofrio
    Hon. Mary DeGenaro
    Dated: June 25, 2010
    -2-
    WAITE, J.
    {¶1}   Appellant Cocca Development, Ltd., appeals the entry of summary
    judgment by the Mahoning County Court of Common Pleas against it and in favor of
    Appellee, Mahoning County Board of Commissioners in this breach of contract
    action.
    {¶2}   Appellant is the successor in interest to 7655, LLC (“7655”), which, in
    2001, was the owner of the Southwoods Executive Center (“Southwoods”) in
    Boardman, Ohio. In 2001, Appellee leased space at Southwoods for the Mahoning
    County Educational Service Center (“MCESC”).            At that time, the county was
    required to provide equipment and office space to the MCESC pursuant to R.C.
    3319.19.
    {¶3}   The county began accepting proposals from prospective lessors of
    office space for MCESC on November 1, 2000.             Throughout the document, the
    packet uses language associated with a traditional RFP and also language
    associated with a traditional bid document.          The proposal packet, specifically
    captioned “Request for Proposals,” (“RFP”), included specifications for the office
    space, blank affidavits, and instructions to bidders.      The instructions to bidders
    explicitly stated that proposals must be submitted on the prescribed form provided
    with the materials, and should not be detached from “the remainder of the contract
    documents.” (Instructions to Bidders, ¶1.1.) Section 1.1 further instructed interested
    persons to furnish a summary of the proposal, which could be provided on separate
    -3-
    paper, “but should be attached to the contract document package.” (Instructions to
    Bidders, ¶1.1.)
    {¶4}   The instructions also included the following provision:
    {¶5}   “16.1 The county may terminate this agreement at any time, in whole
    or in part due to non-appropriation of funds by providing sixty (60) days written notice
    to the vendor. The county shall pay all reasonable costs incurred by the vendor up to
    the date of termination. The vendor will not be reimbursed for any anticipated profits
    which have not been earned to the date of termination [the termination provision].”
    {¶6}   The specifications in the RFP read, in pertinent part: “To determine the
    award of the contract, the County will negotiate using criteria factors including but not
    limited to, ability to meet aforementioned requirements, date of availability for
    occupancy, quality of the proposed facility, interior and exterior aesthetics, and cost
    of the lease.” (Bid Specifications, p. 7.) According to the affidavit of Lynn Davenport,
    7655’s Executive Vice President and Treasurer, the county and 7655 engaged in
    negotiations between the opening of proposals on November 1, 2000, until the
    execution of the lease on February 2, 2001 concerning the layout of space, the work
    to be performed by 7655, use of the building’s auditorium, and a right to relocate
    MCESC to nearby office space. (Davenport Aff., ¶4.)
    {¶7}   The parties executed a ten year lease, with two five year renewal terms,
    on February 15, 2001.       The signature page of the lease indicates that it was
    approved as to form on February 7, 2001 by an assistant prosecutor with the
    Mahoning County Prosecutor’s Office.
    -4-
    {¶8}   On January 1, 2007, R.C. 3319.19 was amended and the county’s
    obligation to provide funding for the MCESC was eliminated. After determining that
    MCESC would not assume the rental obligations under the lease, Appellee elected to
    terminate the lease for non-appropriation of funds. However, the lease itself did not
    contain a provision that authorized Appellee to terminate for that reason.
    {¶9}   Appellant, as successor in interest to 7655, filed a complaint for
    declaratory relief, breach of contract, and equitable and promissory estoppel, as well
    as a motion for a temporary restraining order, asserting that Appellee’s termination of
    the lease constituted a breach of the terms of the lease. Appellee argued in its
    answer that the lease was void because its terms violated Ohio competitive bidding
    laws, and that estoppel cannot be asserted against a government agency.
    {¶10} More specifically, Appellee argued that the lease was the product of the
    competitive bidding process, and, therefore, the lease was void because it did not
    contain all of the material elements contained in the original bid. In this argument,
    Appellee relied on the termination provision in the instructions to bidders. Appellee
    claimed that the absence of a similar provision in the actual lease invalidated the
    lease according to Ohio competitive bidding law.
    {¶11} The trial court agreed, holding that the omission of the termination
    provision in the lease “added an additional provision beneficial to [Appellee],” and, as
    a consequence, the lease was void. (8/6/08 J.E., p. 3.) The trial court’s judgment
    entry presupposed without analysis that the “agreement” referred to in the termination
    -5-
    provision is the lease, and appears to presuppose that the process used to obtain the
    lease was a competitive bid process, not the RFP process.
    {¶12} Although the trial court did not cite any case law in its decision, the
    decision appears to be predicated on the rule of law announced in Checie v.
    Cleveland (November 20, 1939), 8th Dist. No. 17429. According to the Eighth District
    Court of Appeals in Checie, “ ‘[a]ny contract entered into with the best bidder
    containing substantial provisions beneficial to him which were not included in the
    specifications is void for it is not the contract offered to the lowest bidder by the
    advertisement.’ ” Id. at *14, quoting Desmond [sic] v. City of Mankato (1903), 
    89 Minn. 48
    , 
    93 N.W. 911
    , syllabus at paragraph 3.
    {¶13} The Checie Court decided, “ ‘[t]his rule should be strictly enforced by
    the courts, for if the lowest bidder may, by an arrangement with the municipal
    authorities, have incorporated into his form of contract new provisions beneficial to
    him or have onerous ones excluded therefrom which were in the specifications upon
    which the bids were invited, it would emasculate the whole system of competitive
    bidding.’ ” 
    Id.,
     quoting Desmond [sic] at 53.
    {¶14} In the matter sub judice, Appellant argues that the “agreement” referred
    to in the termination provision is not the lease, but, rather, the agreement that existed
    pursuant to an RFP between the county and 7655 after 7655’s proposal was
    submitted and prior to the execution of the lease. As earlier discussed, Appellee
    contends that the “agreement” referred to in the termination provision is the lease,
    itself.
    -6-
    {¶15} Appellant further argues that, even if the “agreement” referred to in the
    termination provision is the lease, the lease at issue in this case is not subject to Ohio
    competitive bidding law pursuant to R.C. 307.86(I), which specifically exempts leases
    for office space from conformance with R.C. 307.86. Subsection (I) exempts leases
    for office space where:
    {¶16} “(a) The contracting authority is authorized by the Revised Code to
    lease the property.
    {¶17} “(b) The contracting authority develops requests for proposals for
    leasing the property, specifying the criteria that will be considered prior to leasing the
    property, including the desired size and geographic location of the property.
    {¶18} “(c) The contracting authority receives responses from prospective
    lessors with property meeting the criteria specified in the requests for proposals by
    giving notice in a manner substantially similar to the procedures established for giving
    notice under section 307.87 of the Revised Code.
    {¶19} “(d) The contracting authority negotiates with the prospective lessors to
    obtain a lease at the best and lowest price reasonably possible considering the fair
    market value of the property and any relocation and operational costs that may be
    incurred during the period the lease is in effect.”
    {¶20} For its argument, Appellant relies on the title of the document issued by
    the county, that is, the “Request for Proposals,” the discretionary language in the bid
    specifications, and the negotiations following the selection of 7655’s proposal to
    argue that the RFP at issue is not governed by Ohio competitive bidding law. In
    -7-
    other words, even if the “agreement” in the termination provision referred to the
    lease, and the termination provision was a material provision in the RFP, the county
    had the discretion to negotiate the termination provision out of the lease and
    exercised that discretion.
    {¶21} Appellee does not argue that the RFP in this case does not fall within
    the ambit of subsection (I), but, instead, that the county elected to competitively bid
    the lease rather than issue a request for proposals pursuant to subsection (I) of the
    statute. Appellee’s purchasing director, James Fortunato, claimed that the county
    used a competitive bidding process in procuring office space of MCESC. (Fortunato
    Aff., ¶4.)
    {¶22} Based on the record before us, we find that the “agreement” referred to
    in the termination provision was the agreement that existed between the parties after
    the submission of 7655’s proposal but before the execution of the lease.           The
    document at issue was clearly the product of an RFP and not of the traditional bid
    process. Although the language in the RFP appears ambiguous, extrinsic evidence
    supports the conclusion that Appellant’s interpretation of the termination provision is
    reasonable, because Appellee did not object to the omission of the termination
    provision from the lease. Furthermore, any ambiguity should be resolved in favor of
    Appellant because Appellant is the non-drafting party.
    ASSIGNMENT OF ERROR NO. 1
    -8-
    {¶23} “The trial court erred by concluding that the Request for Proposals
    required the Lease to provide that the tenant may terminate the Lease at any time on
    sixty day’s notice.”
    {¶24} Before the trial court were the affidavit and deposition of James
    Fortunato, the affidavits of Lynn Davenport, James Tablack, and Anthony Cocca, the
    blank RFP form, the completed RFP form submitted by 7765, the lease, excerpts
    from the Mahoning County Purchasing Policies & Procedures Manual, and the
    subordination agreement.
    {¶25} The construction of the terms of a contract is a question of law to be
    decided by the courts, and is also reviewed de novo on appeal.            Lovewell v.
    Physicians Ins. Co. of Ohio (1997), 
    79 Ohio St.3d 143
    , 144, 
    679 N.E.2d 1119
    . In
    construing the terms of a written contract, the court must give effect to the intent of
    the parties; the intent is presumed to rest in the language that the parties have
    chosen to employ. Saunders v. Mortensen, 
    101 Ohio St.3d 86
    , 
    2004-Ohio-24
    , 
    801 N.E.2d 452
    , at ¶9, citing Kelly v. Med. Life Ins. Co. (1987), 
    31 Ohio St.3d 130
    , 
    509 N.E.2d 411
    , paragraph one of the syllabus. “Common words appearing in a written
    instrument will be given their ordinary meaning unless manifest absurdity results, or
    unless some other meaning is clearly evidenced from the face or overall contents of
    the instrument.” Alexander v. Buckeye Pipe Line Co. (1978), 
    53 Ohio St.2d 241
    , 
    374 N.E.2d 146
    , paragraph two of the syllabus.
    {¶26} Where the terms of a contract are clear and unambiguous, a court need
    not look beyond the plain language of the agreement to determine the rights and
    -9-
    obligations of the parties. Aultman Hosp. Assn. v. Community Mut. Ins. Co. (1989),
    
    46 Ohio St.3d 51
    , 53, 
    544 N.E.2d 920
    . If a contract is reasonably susceptible to
    more than one meaning, then it is ambiguous and extrinsic evidence of
    reasonableness or intent can be employed. City of Steubenville v. Jefferson Cty., 7th
    Dist. No. 07 JE 51, 
    2008-Ohio-5053
    , ¶22.
    {¶27} Ambiguous contracts are construed against the drafter. Handel’s Ent.,
    Inc. v. Wood, 7th Dist. Nos. 04MA238, 05MA70, 
    2005-Ohio-6922
    , ¶104, citing
    Graham v. Drydock Coal Co. (1996), 
    76 Ohio St.3d 311
    , 314, 
    667 N.E.2d 949
    .
    However, “this rule of construction is merely a guiding principle the court uses in
    determining the parties’ intent after viewing the extrinsic evidence presented by the
    parties.” Beverly v. Parilla, 
    165 Ohio App.3d 802
    , 2006-Ohio1286, 
    848 N.E.2d 881
    ,
    ¶30.
    {¶28} Because the termination provision is in the instructions to “bidders”
    portion of the document rather than the “bid specification” section of the packet, and
    the lease is referred to throughout the instructions as either “the contract” or “the
    Contract,” Appellant argues that the “agreement” referred to in the termination
    provision is the agreement between the parties to enter into the lease. In other
    words, the termination provision was intended to govern the relationship between the
    county and 7655 during the time between the submission of 7655’s proposal and the
    execution of the lease.
    {¶29} Appellee contends that the “agreement” referred to in the termination
    provision actually refers to the lease.    Appellee states, “because no agreement
    -10-
    existed between the parties until after the contract was awarded, one can only
    conclude that this provision applied to the Lease Agreement and not to the bid packet
    itself.    And simply because Cocca may have elected to include this provision
    elsewhere in the bid packet does not somehow eliminate the purpose of this
    language.” (Emphasis in original.) (Appellee Brf., p. 6.) Moreover, Appellee relies
    on the fact that the instructions to “bidders” and the specifications were identified as a
    single document, and prospective proposals would not be accepted if the instructions
    were separated from the specification documents.
    {¶30} We find that the “agreement” referred to in the termination provision
    refers to the agreement that existed between the county and 7655 following the
    submission of 7655’s proposal and prior to the execution of the lease. Although the
    termination provision is ambiguous, several other provisions in the instructions clearly
    address this specific time frame. For instance, Section 9.0, captioned: “FAILURE
    TO DELIVER ON TIME,” reads, “[f]or each calendar day that lapses after the
    prescribed time given in the proposal for delivery on performance, the sum of one-
    hundred dollars $100.00 per day shall be deducted from any money due the
    contractor, not as a penalty but as liquidated damages.” Section 5.8, captioned:
    “Failure to enter into contract upon award,” reads, “[i]n the event that the bidder fails
    to enter the contract upon award, the certified check or bond will be forfeited to
    Mahoning County as liquidated damages for the delay and expense caused by the
    bidder’s default.” Likewise, the placement of the provision in the instructions, rather
    than the specifications, also supports the conclusion that the termination provision
    -11-
    was intended to govern the relationship of the parties prior to the execution of the
    lease.
    {¶31} Additionally, the extrinsic evidence in this case, the fact that Appellee
    did not object to the omission of the termination provision from the lease, supports
    the conclusion that Appellant’s interpretation of the phrase “this agreement” is
    reasonable. The lease document was approved by an agent of Appellee. Moreover,
    Appellee drafted the RFP, and, as a consequence, any ambiguities should be
    resolved in favor of Appellant. In other words, to the extent that the documents
    attached to the RFP are referred to in the instructions as “the contract documents,”
    this ambiguity should be resolved in favor of the non-drafting party. Handel’s, supra.
    {¶32} Because the trial court could not have concluded that the termination
    provision was a material term of 7655’s proposal without first concluding that the
    “agreement” in the termination provision referred to the lease, we find that the trial
    court erred as a matter of law, and reverse the judgment of the trial court. Appellant’s
    first assignment of error is sustained.
    {¶33} Since we have sustained Appellant’s first assignment of error, the
    second assignment of error would ordinarily be moot, especially since Appellant has
    argued these assignments in the alternative. However, since the issue in the second
    assignment is actually crucial to explain the determination of the first assignment, it
    must be addressed.
    ASSIGNMENT OF ERROR NO. 2
    -12-
    {¶34} “The trial court erred by failing to conclude that the Lease was the valid
    product of negotiations pursuant to the office-lease request-for-proposals exception
    to the competitive bidding statutes.”
    {¶35} Appellee claims that, “after being awarded the bid, 7655, LLC
    presented Mahoning County with a lease agreement that not only omitted the
    termination provision originally contained in its proposal but added a substantial
    provision wholly beneficial to it.” (Appellee’s Brf., p. 10.)
    {¶36} Article 4.1 of the lease reads, in pertinent part:
    {¶37} “Tenant represents that a current appropriation is available for the
    Minimum Rent and additional rent during the Initial Term.         Concurrently with the
    execution and delivery of this Lease, and as a condition to the effectiveness thereof,
    Tenant shall deliver to Landlord written evidence that there is a balance, not already
    obligated to pay existing obligations, in the appropriation available to pay the
    Minimum Rent during the Initial Term.”
    {¶38} Appellee argues that Article 4.1 of the lease is a “substantial provision
    wholly beneficial to [Appellant].” (Appellee’s Brf., p. 10.) Appellee further argues that
    Article 4.1 is a “legal nullity” because R.C. 5705.41(D) “provides that a county may
    only appropriate funds necessary to fulfill the obligations due in a single calendar
    year.” (Appellee’s Brf., pp. 10-11, fn. 2.)
    {¶39} In fact, R.C. 5705.41 reads, in pertinent part:
    {¶40} “No subdivision or taxing unit shall:
    {¶41} “* * *
    -13-
    {¶42} “(D)(1) Except as otherwise provided in division (D)(2) of this section
    and section 5705.44 of the Revised Code, make any contract or give any order
    involving the expenditure of money unless there is attached thereto a certificate of
    the fiscal officer of the subdivision that the amount required to meet the obligation or,
    in the case of a continuing contract to be performed in whole or in part in an ensuing
    fiscal year, the amount required to meet the obligation in the fiscal year in which the
    contract is made, has been lawfully appropriated for such purpose and is in the
    treasury or in process of collection to the credit of an appropriate fund free from any
    previous encumbrances. This certificate need be signed only by the subdivision's
    fiscal officer. Every such contract made without such a certificate shall be void, and
    no warrant shall be issued in payment of any amount due thereon. * * *”
    {¶43} R.C. 5705.44 limits a county’s authority to appropriate funds beyond a
    fiscal year.    R.C. 5705.44, captioned:     “Contracts running beyond fiscal year;
    contracts payable from utility earnings,” reads, in pertinent part, “[t]he amount of the
    obligation under such contract or lease remaining unfulfilled at the end of the fiscal
    year, and which will become payable during the next fiscal year, shall be included in
    the annual appropriations measure for the next year as a fixed charge.”
    {¶44} Appellee relies on the premise that the RFP was actually a request for
    competitive bids in order to argue that the inclusion of Article 4.1 into the lease voids
    the contract.    Appellee claims that the rule in Checie prevents Appellant from
    including any provision favorable to Appellant in the lease that was not included in
    the bid specifications.
    -14-
    {¶45} Under Ohio’s competitive bidding statute, public agencies are required
    to award a public contract to the “lowest and best” bidder. R.C. 307.86. The intent of
    competitive bidding is, “ ‘to provide for open and honest competition in bidding for
    public contracts and to save the public harmless, as well as bidders themselves, from
    any kind of favoritism or fraud in its varied forms.’ ” Cedar Bay Constr., Inc. v.
    Fremont (1990), 
    50 Ohio St.3d 19
    , 21, 
    552 N.E.2d 202
    , 204, quoting Chillicothe Bd.
    of Edn. v. Sever-Williams Co. (1970), 
    22 Ohio St.2d 107
    , 115, 
    51 O.O.2d 173
    , 177-
    178, 
    258 N.E.2d 605
    , 610. See, also, Hardrives Paving & Constr., Inc. v. Niles
    (1994), 
    99 Ohio App.3d 243
    , 247, 
    650 N.E.2d 482
    , 484-485. However, the general
    assembly exempted certain contracts from the competitive bidding statute, including
    leases for office space, which may be entered into through a request for proposal
    process.
    {¶46} In Danis Clarkco Landfill Co. v. Clark Cty. Solid Waste Mgt. Dist.
    (1995), 
    73 Ohio St.3d 590
    , 
    653 N.E.2d 646
    , the Ohio Supreme Court explained the
    distinction between procurement through requests for proposals and competitive
    bidding. In that case, the district issued a request for proposals in order to contract
    with a provider of waste disposal services for the county. Following the selection of
    the proposal submitted by Ogden Martin Systems, Inc. (“OM”), the district engaged in
    negotiations with OM in an effort to enter into a contract with OM for waste disposal
    services.
    {¶47} A landfill operator whose proposal was rejected by the district filed a
    declaratory judgment action seeking to prevent the district from accepting OM’s
    -15-
    proposal.     The landfill operator argued that OM’s request for proposals, which
    included several components of competitive bidding, was, as a result of the inclusion
    of those components, subject to the competitive bidding statute. The Ohio Supreme
    Court held:
    {¶48} “The court of appeals in this case recognized that ‘[n]egotiating material
    aspects of contracts after the bid opening is violative of the sanctity and integrity of
    competitive bidding.’ Review of the District’s RFP makes it clear that the District
    chose a process which can only in the most general sense be deemed to be
    ‘competitive bidding.’   See Yellow Cab of Cleveland, Inc. v. Greater Cleveland
    Regional Transit Auth. (1991), 
    72 Ohio App.3d 558
    , 561, 
    595 N.E.2d 508
    , 509
    (‘ “[T]he RFP method of procurement is not competitive bidding.” ’) Certainly, the
    RFP process did not contemplate the execution of a contract based upon a simple
    acceptance by the District of the successful bidder’s original proposal. Rather, the
    RFP contemplated an award solely of the opportunity to further negotiate to reach a
    possible contract with the District.” (Emphasis in original.) Id. at 600.
    {¶49} The Ohio Supreme Court further held that the district’s decision to
    incorporate components of competitive bidding into the request for proposals process
    did not convert this process into competitive bidding.        Although the district was
    required to comply with any competitive bidding provisions that were incorporated
    into the request for proposals, the Danis Court concluded that the district was not
    “bound to the full panoply of statutory bid requirements set forth in R.C. Chapter 307.”
    Id. at 603.
    -16-
    {¶50} The Tenth District Court of Appeals in Wheeling Corp. v. Columbus &
    Ohio River Railroad Co. (2001), 
    147 Ohio App.3d 460
    , 
    771 N.E.2d 263
    , observed
    that the district in Danis, “sufficiently defined the RFP process as subject to eventual
    negotiation of a final agreement which might vary substantially from the original terms
    of the RFP,” and, as a result, “the unsuccessful bidder was not entitled to an
    injunction, absent fraud or abuse of discretion by the district, to invalidate the
    outcome of the RFP.” Id. at 485.
    {¶51} The Wheeling Corp. Court reached this conclusion despite the fact that
    the parties to that appeal urged diametrically opposed interpretations of the Ohio
    Supreme Court’s holding in Danis:
    {¶52} “Appellant asserts that the Ohio Supreme Court clearly held in Danis
    that, once a government entity issues an RFP, it is bound by the terms expressed
    therein and may not deviate in the slightest from those literal terms when rating
    proposals and negotiating with the finalist proposers. Appellees, to the contrary, rely
    on Danis for the proposition that modifications to an RFP which are done rationally,
    fairly, and in good faith, based upon the best interest of the parties when arriving at a
    mutually beneficial agreement, are within the discretion of the public agency issuing
    the RFP. Our interpretation of Danis lies between these extremes. Where the RFP
    in question provides for discretion on the part of the issuing authority, pursuant to
    Danis, absent fraud or abuse of discretion, the issuing authority may vary the terms
    of the ultimate agreement from the original guidelines of the RFP. Where the RFP
    -17-
    explicitly forecloses variance, however, we read Danis as requiring adherence to the
    terms of the RFP when executing the resulting contract.” Id.
    {¶53} It is clear from the plain language of the RFP before us that Appellee
    contemplated negotiations following the issuance of the RFP, and that, like the
    process in Danis, “the RFP contemplated an award solely of the opportunity to further
    negotiate to reach a possible contract” with the county. (Emphasis in original.) Id. at
    600. Even though the RFP contained certain elements of competitive bidding, e.g.,
    sealed bids, bid bonds, performance bonds, and public opening of bids, the use of
    components of competitive bidding does not convert the RFP into a request for
    competitive bids. Id. at 603. Therefore, the trial court erred as a matter of law in
    concluding that the RFP at issue was a request for competitive bids, and Appellee’s
    reliance on Article 4.1 of the lease to void the lease pursuant to Checie is meritless.
    {¶54} Further, even though Article 4.1 of the lease is contrary to law, and,
    therefore, unenforceable, the lease itself is not void as a matter of law. See Morrow
    Cty. Airport Auth. v. Whetstone Flyers, Ltd., 
    112 Ohio St.3d 419
    , 
    2007-Ohio-255
    , 
    860 N.E.2d 733
    , ¶9 (“The court of appeals cites the Eleventh District Court of Appeals for
    the proposition that contracts made in violation of state statute or in disregard of such
    statutes are void. See Benefit Servs. of Ohio, Inc. Trumbull Cty. Commrs., 11th Dist.
    No. 2003-T-0045, 
    2004-Ohio-5631
    , ¶33. But neither the General Assembly nor this
    court has ever made such a declaration.”) Based on all of the above, Appellant’s
    second assignment of error is sustained, as well.
    -18-
    {¶55} Finally, it is important to note that, in Ohio, a lessor has a duty to
    mitigate damages caused by a lessee’s breach of a commercial lease if the lessee
    abandons the leasehold. Frenchtown Square Partnership v. Lemstone, Inc., 
    99 Ohio St.3d 254
    , 
    2003-Ohio-3648
    , paragraph one of the syllabus. The lessor’s efforts to
    mitigate must be reasonable, and the reasonableness should be determined by the
    trial court.   
    Id.,
     at paragraph two of the syllabus.   It appears on the record that
    Appellant mitigated their damages, at least in part, insofar as MCESC executed a
    lease with Appellant on July 19, 2007 for separate office space at Southwoods, but
    enough facts do not appear of record for this Court to make any final determination
    on the issue of damages. Therefore, the matter must be sent back to the trial court.
    {¶56} Accordingly, Appellant’s assignments of error are sustained, and the
    judgment of the trial court is reversed. This matter is remanded to the trial court on
    the issue of damages.
    Donofrio, J., concurs.
    DeGenaro, J., concurs.
    

Document Info

Docket Number: 08 MA 163

Citation Numbers: 2010 Ohio 3166

Judges: Waite

Filed Date: 6/25/2010

Precedential Status: Precedential

Modified Date: 3/3/2016