G.A.I. Capital Group v. Lisowski , 2023 Ohio 4802 ( 2023 )

[Cite as G.A.I. Capital Group v. Lisowski, 2023-Ohio-4802.]
IN THE COURT OF APPEALS OF OHIO
SEVENTH APPELLATE DISTRICT
MAHONING COUNTY
G.A.I. CAPITAL GROUP LLC,
Plaintiff-Appellee,
v.
EDWARD LISOWSKI et al.,
Defendants-Appellants.
OPINION AND JUDGMENT ENTRY
Case No. 23 MA 0052
Civil Appeal from the
Mahoning County Court No. 5 of Mahoning County, Ohio
Case No. 2022 CV F 00010
BEFORE:
Carol Ann Robb, Cheryl L. Waite, Mark A. Hanni, Judges.
JUDGMENT:
Affirmed in part, Reversed in part, Remanded.
Atty. Brian A. Coulter, Brouse McDowell LPA, for Plaintiff-Appellee and
Atty. Jeffrey A. Kurz, for Defendants-Appellants.
Dated: December 28, 2023
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Robb, J.
{¶1} Appellants, Edward Lisowski, and Kimberly Lisowski and Concepts &
Creativity, LLC, appeal the judgment granting Appellee, G.A.I. Capital Group, LLC,
judgment and damages in the amount of $7,253.50 plus interest following a bench trial.
Appellants raise nine assignments of error.
{¶2} For the following reasons, we affirm in part, reverse in part, and remand for
further proceedings.
Statement of the Facts and Case
{¶3} Appellee filed suit in January of 2022 against Appellants Edward and
Kimberly Lisowski individually and their limited liability company, Concepts & Creativity,
LLC (hereafter C&C). Appellee purchased the building and acquired two leases listing
Appellants as lessors. Appellants owned and operated a dance studio from the building
until sometime in 2020.
{¶4} Appellee listed three causes of action: breach of contract, breach of
guaranty, and unjust enrichment. Appellee claimed that after it purchased the building,
Appellants failed to pay their monthly lease total of $2,100 for July through October of
2020. And after Appellants vacated the building, Appellee claims to have incurred
damages to repair the interior and for trash removal. Attached to the complaint are
Appellants’ leases, marked as exhibits A and B.
{¶5} Appellants Edward Lisowski and Kimberly Lisowski filed separate answers,
and Edward filed a cross-claim against Kimberly, his ex-wife. Appellants also filed
separate summary judgment motions, which the trial court summarily overruled.
{¶6} The case was heard at a bench trial in February of 2023. Three witnesses
testified at trial.
{¶7} Appellee’s first witness was Attorney John McNally, counsel for Canfield
Properties, LLC, the company that leased the premises to Appellants and sold the real
property to Appellee. McNally did not draft the lease agreements, but authenticated the
two leases at trial. The 2009 lease required a monthly payment of $607 and the 2008
lease required a monthly payment of $862.50.
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{¶8} McNally likewise authenticated a ledger of amounts Appellants paid to
Canfield Properties in 2020. The ledger reflects payments in the amount of $2,100 for
January, February, March, April, and May. For the month of June 2020, the ledger
indicates “free rent.” And for July, the ledger reflects payments in the amount of $1,050.
(Trial Tr. 14-19; Exhibit C.)
{¶9} The president of G.A.I. Capital Group, Terrill Vidale, also testified. He
explained how his company, G.A.I., acquired the building and Appellants’ leases from
Canfield Properties. It consisted of nine rental units. He testified twice that Appellants
occupied five units, units B,C, D, I, and O, with a collective total monthly rent of $2,100.
{¶10} G.A.I. was to first collect lease payments from Appellants beginning in July
of 2020. Vidale dealt with both Edward and Kimberly regarding the property. Vidale said
he never agreed to give Appellants free rent.
{¶11} Vidale testified that when he encountered Appellants, they kept promising
to pay him but never did. Finally, he gave them a three-day notice to vacate, and they
moved out. (Trial Tr. 79-80, 96.)
{¶12} He said Appellants were not prevented from cleaning out their rented units
when they left. Vidale said he changed the locks at the end of October of 2020, but did
not deny Appellants access to clean out their spaces. Vidale took photographs of the
condition of the property when Appellants left. Appellee introduced his photographs of
the damaged floor, walls, and discarded items left in the spaces. Because he is a
commercial landlord, he usually takes photographs when a tenant leaves a property.
Vidale paid $1,800 to have the units cleaned and repaired. (Trial Tr. 63-67.) On cross-
examination, he said he did not remember whether the mirrors were still on the walls
when Appellants vacated the units. He did not remove the mirrors, but he paid another
individual to do it. The walls were damaged from where the mirrors were hung requiring
resurfacing of drywall. (85-87.)
{¶13} Janice Semple was the sole defense witness to testify. She was C&C’s
office manager and is Kimberly’s mother. Semple was not present when any of the leases
were agreed upon or executed. She described Edward as not being active in the day-to-
day business operations. She explained how he mostly helped Kimberly when something
needed repaired or for maintenance. (Trial Tr. 103-105; 119.)
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{¶14} Semple was present during an August 2020 meeting between Kimberly,
Edward, and Vidale. During this meeting, Vidale expressed concerns that Appellants had
not yet re-signed their lease. She recalls he was also asking for rent payments at this
meeting.
{¶15} According to Semple, Kimberly refused to sign a new lease because her
number of students had significantly reduced due to Covid-19. Semple stated Kimberly
volunteered to leave the space, but Vidale indicated he did not want an empty building.
Semple stated: “[Vidale] did not want the building empty. He was afraid the banks were
going to come back on him because he - - he said he had a million dollar loan with the
bank * * *.” When Semple was asked about whether he told Appellants not to pay rent,
she said, “He said not to worry about it.” (Trial Tr. 103.)
{¶16} Semple explained on cross-examination that the dance company was not
actually using the space during these last few months because of Covid-19, but they did
keep their dance studio property there. The dance classes were being held outside and
at another location because of the pandemic. They had very low enrollment numbers.
(Trial Tr. 128-129.)
{¶17} C&C vacated the premises on October 30, 2020. Semple agreed the
photos of the units accurately depicted the condition of the premises when they left. They
intended to return to remove trash, but according to Kimberly, Vidale had changed the
locks. They left mirrors hanging on the walls and a pile of trash. Semple said that they
did not contact Vidale in order to gain access and finish their clean up. She stated,
“[w]hen you’re told you have to stay away that’s what you do.” (Trial Tr. 110-117.)
{¶18} No party or individual who was present when either lease agreement was
negotiated or executed testified at trial.
{¶19} The parties submitted proposed findings of fact and conclusions of law, and
the trial court issued judgment in Appellee’s favor on March 17, 2023. The court rejected
Appellants’ statute of conveyances and statute of frauds arguments. It explained the
leases were for a term of less than three years, and the leases were validated via the
parties’ partial performance since Appellants had occupied the space and paid rent for
more than a decade.
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{¶20} The trial court found there was no ambiguity in either lease agreement and
that the “Tenant” as defined in both included the limited liability company and its members.
The court stated in part: “the Court holds that all Defendants are parties to both Lease
Agreements and that they are jointly and severally liable for Plaintiff’s damages. The
plain language of the Lease Agreements defines the Tenant as, ‘Concepts & Creativity
LLC Members dba Dance Studio.’ This description, although unusual, is plain, ordinary
language.” (March 17, 2023 Judgment). And upon assigning meaning to all words in the
contract, the court found the word “Members” in the “Tenant” definition made the
members, Kimberly and Edward, personally liable, in addition to the company. (March
17, 2023 Judgment).
{¶21} The trial court found Kimberly personally guaranteed both leases, whereas
Edward only personally guaranteed the second lease agreement. It found Appellants had
breached the lease agreements and awarded damages to Appellee in the amount of
$7,253.50 against all Appellants joint and several, i.e., C&C, Edward, and Kimberly. It
further concluded there was no just reason for delay. (March 17, 2023 Judgment).
Appellants collectively appealed the court’s judgment.
{¶22} The trial court granted Appellants’ requested stay of its judgment pending
appeal.
Personal Liability for Lease Agreements
{¶23} Appellants consolidate their first three assigned errors, which assert:
“The trial court erred when it: (I) Found the leases to be unambiguous and
interpreted the lease terms in a light most favorable to the drafter instead of the non-
drafting party; (II) Found Kim Lisowski personally liable on the 1st lease as a lessee and
guarantor; and (III) Found Kim and Ed Lisowski both personally liable on the 2 nd lease a
lessees and guarantors.”
{¶24} Appellants first contend the lease agreements are ambiguous as to who the
“tenant” or “lessor” is, and thus, they assert both leases should be construed against
Appellee. Appellants claim that both leases are only binding on their company, and not
Edward and Kimberly individually.
{¶25} Second, Appellants claim the guarantee set forth in paragraph 22 of both
leases is not binding in light of the manner that Edward and Kimberly signed the contract
Case No. 23 MA 0052
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as “members” of the LLC, not in their individual capacities. Consequently, Appellants
claim the court erred by finding their signatures, in which they indicate they were signing
in a representative capacity, also bound them as personally guaranteeing the leases.
Appellants claim the trial court’s judgment finding them personally responsible must be
reversed. For the following reasons, we disagree.
{¶26} This appeal concerns two agreements by which Appellants leased certain
units in a building owned by Appellee. For the most part, the lease agreements are the
same and arise from the same form agreement. Each agreement leases certain units in
the same building to Appellants.
{¶27} There is no dispute about the property Appellants rented or the authenticity
of the two lease agreements introduced at trial. Appellants do not challenge the court’s
breach of contract conclusion—they dispute who the tenant is under each lease and who
is responsible for the breach.
{¶28} The construction of contracts is a matter of law, which we review de novo
and without regard to the trial court’s holding. Cent. Funding, Inc. v. CompuServe
Interactive Servs., Inc., 10th Dist. No. 02AP-972, 2003-Ohio-5037, ¶ 42, citing Alexander
v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146 (1978), paragraph one of
the syllabus. We must read the applicable contract in its entirety, give effect to each
provision, and ascertain the intent of the parties from considering it as a whole. Saunders
v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801 N.E.2d 452, ¶ 16. “Courts should
attempt to harmonize provisions and words so that every word is given effect.” Christe v.
GMS Mgt. Co., 124 Ohio App.3d 84, 88, 705 N.E.2d 691 (9th Dist.1997).
When construing a contract, a court's principle objective is to ascertain and
give effect to the intent of the parties. Hamilton Ins. Servs., Inc. v.
Nationwide Ins. Cos., 86 Ohio St.3d 270, 273, 1999 Ohio 162, 714 N.E.2d
898 (1999). “The intent of the parties to a contract is presumed to reside in
the language they chose to employ in the agreement.” Kelly v. Med. Life
Ins. Co., 31 Ohio St.3d 130, 31 Ohio B.R. 289, 509 N.E.2d 411 (1987),
paragraph one of the syllabus. Thus, where the terms of a contract are
clear and unambiguous, a court cannot look beyond the plain language of
the agreement to determine the rights and obligations of the parties. Cocca
Case No. 23 MA 0052
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Dev., 7th Dist. No. 08MA163, 2010-Ohio-3166, at ¶ 26, citing Aultman
Hospital Ass'n v. Community Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 53,
544 N.E.2d 920 (1989). However, 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. Id., citing City of Steubenville v.
Jefferson Cty., 7th Dist. No. 07JE51, 2008-Ohio-5053, ¶ 22.
7 Med. Sys., LLC v. Open MRI of Steubenville, 7th Dist. Jefferson No. 11 JE 23, 2012-
Ohio-3009, ¶ 27.
{¶29} When construing a contract, we must employ the plain meaning of the terms
used, unless a manifestly absurd outcome results or if there is clear evidence of a different
meaning when reviewing the agreement in total. Alexander v. Buckeye Pipeline Co., 53
Ohio St.2d 241, 245, 374 N.E.2d 146 (1978); Cooper Tire & Rubber Co. v. Warner
Mechanical Corp., 3d Dist. Hancock No. 5-06-39, 2007-Ohio-1357, ¶ 10.
{¶30} Furthermore, courts review guarantee agreements like any other contract,
which are governed by the plain language of the terms used in the writing. O'Brien v.
Ravenswood Apartments, Ltd., 169 Ohio App. 3d 233, 240-241, 862 N.E. 2d 549 (2006),
citing Stone v. Natl. City Bank, 106 Ohio App.3d 212, 217, 665 N.E.2d 746 (8th Dist.1995),
cause dismissed, 74 Ohio St.3d 1495, 658 N.E.2d 1064 (1996).
{¶31} “To construe or interpret what is already plain is not interpretation” and is
not our function when a writing is unambiguous. Lake Hosp. Sys., Inc. v. Ohio Ins. Guar.
Assn., 69 Ohio St.3d 521, 524, 634 N.E.2d 611 (1994), quoting Iddings v. Bd. of Edn. of
Jefferson Cty. School Dist., 155 Ohio St. 287, 290, 98 N.E.2d 827 (1951) (addressing
statutory construction). Absent an ambiguity, courts must apply a guarantee or contract
“as written and conduct no further investigation.” State v. Hurd, 89 Ohio St.3d 616, 2000-
Ohio-2, 734 N.E.2d 365, citing State ex rel. Herman v. Klopfleisch, 72 Ohio St.3d 581,
584, 651 N.E.2d 995 (1995) (addressing statutory language).
{¶32} The first lease dated September 1, 2008, concerns 1150 square feet of
space referred to as Suite 0, and requires the payment of $862.50 per month. (Exhibit
A.)
{¶33} The second lease dated September 1, 2009, concerns 1120 square feet of
space referred to as Suites B, C, and D, and requires the payment of $607 per month
Case No. 23 MA 0052
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(Exhibit B.) The written lease agreements only reference four units. Notwithstanding,
Vidale testified Appellants were renting five total units, i.e., units B, C, D, I, and O. Both
leases state at the top of the first page:
LEASE AGREEMENT
This Agreement made and entered into this * * * day * * * by and between
Canfield Properties hereinafter referred to as “Landlord” and Concepts &
Creativity LLC Members dba Dance Studio, hereinafter referred to as
“Tenant”.
{¶34} Paragraph 16, titled “Notices” on the second page of both lease agreements
states where notices and demands are to be mailed regarding the lease agreements.
This paragraph states in part that any notices or demands “shall be mailed” and
addressed as follows: “TENANT: Kim & Ed Lisowski/ Concepts & Creativity LLC
Members.”
{¶35} Both lease agreements also contain the same paragraph 22 on page three,
which states:
“22. Personal Guarantee. I _Kim & Ed Lisowski_ in order to induce the
lessor to enter in to the above lease agreement hereby personally guaranty
the performance of the obligation of lessee describe[d] there in. [sic.]”
(Emphasis sic.) (Exhibits A & B.)
{¶36} As for signatures, the 2008 lease agreement, Exhibit A, was signed by the
landlord’s representative and under the tenant’s line it states:
TENANT
Mr. & Mrs.
dba Concepts & Creativity, LLC
BY: Member, Kimberly Lisowski
(Exhibit A.) The italicized and underlined portion of the above is handwritten in cursive,
whereas the other words are typewritten. The 2008 lease was not signed by Edward
Lisowski.
{¶37} The signature lines for the 2009 lease states:
“TENANT
Mr. & Mrs.
Case No. 23 MA 0052
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dba
BY: Kimberly Lisowski
“TITLE: member”
{¶38} The 2009 lease was also signed “Edward Lisowski, Member” at the bottom
left-side of the same page across from where Kimberly signed. The date next to
Kimberly’s signature is handwritten as 8-30-09, and the date next to Edward’s signature
is handwritten as 8-31-09. (Exhibit B.)
{¶39} Both agreements have the terms “Mr. & Mrs.” preprinted in the signature
block and neither Edward nor Kimberly signed in this area. (Exhibits A & B.)
{¶40} As stated, Appellants contend the foregoing contractual language is
ambiguous and requires extrinsic evidence to ascertain the parties’ intent. Appellee
counters the same is unambiguous and should be applied as written.
{¶41} A plain reading of the agreements shows the tenant for each lease is
identified as the members of the limited liability company. Both leases state “Concepts &
Creativity LLC Members dba Dance Studio, hereinafter referred to as ‘Tenant’.”
{¶42} “‘Member’ means a person that has been admitted as a member of a limited
liability company under section 1706.27 of the Revised Code and that has not dissociated
as a member.” R.C. 1706.01. Members of a limited liability company are not generally
responsible for the agreements or debts of the limited liability company to which they are
a member. R.C. 1706.26. However, this general rule does not apply when the plain
language of a contract binds the members individually.
“An officer of a corporation is not personally liable on contracts * * * for which
his corporate principal is liable, unless he intentionally or inadvertently binds
himself as an individual.” Centennial Ins. Co. Of New York v. Vic Tanny
Internat'l. Of Toledo, Inc. (1975), 46 Ohio App.2d 137, 142; Spicer v. James
(1985), 21 Ohio App.3d 222; Hommel v. Micco (1991), 76 Ohio App.3d 690,
697; and Heritage Funding & Leasing Co. v. Phee (1997), 120 Ohio App.3d
422. Whether or not a corporate officer can be held personally liable
depends upon “the form of the promise and the form of the signature.”
Spicer, supra at 223. If there is a question as to whether or not a person
signed a contract in an individual or corporate capacity, parol evidence is
Case No. 23 MA 0052
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admissible to show representative capacity. Wise v. Duker (1988), 57 Ohio
App.3d 62, 63.
Michael Benza & Assoc. v. Joh-Mar Co., 8th Dist. Cuyahoga No. 73875, 1999 WL 13987,
*2.
{¶43} Upon reviewing the agreements as a whole and when giving all the lease
terms meaning, we conclude the lease agreements as written are not ambiguous and
there is “no question” as to what capacity Appellants signed them.
{¶44} Both leases make it clear the members of the limited liability company, not
C&C, are the tenant. This is the only reasonable conclusion upon reading the definition
of “Tenant” and the agreement in its entirety. “Tenant” is defined as “Concepts &
Creativity LLC Members dba Dance Studio * * *.” There is no comma or “and” between
the terms “LLC” and “Members”. The leases do not identify the company as the tenant,
but states the company’s members are the tenants.
{¶45} Further, there are additional references throughout the agreements where
the term “Tenant” is written. Each is accompanied by the names of the individual
members, i.e., Edward and Kimberly Lisowski. Thus, we conclude the tenant consists of
only the members of the LLC—not the LLC and its members.
{¶46} This conclusion is also bolstered by the personal guarantee clause in
paragraph 22 of both versions of the lease.
{¶47} “If a person can read and is not prevented from reading what he signs, he
alone is responsible for his omission to read what he signs.” Haller v. Borror Corp., 50
Ohio St.3d 10, 14, 552 N.E.2d 207 (1990). Parties to an agreement have an obligation
to read what they are signing. See E. Liverpool v. Owners Ins. Co., 2021-Ohio-1474, 171
N.E.3d 1207, ¶ 69 (7th Dist.), appeal not allowed sub nom. Liverpool v. Owners Ins. Co.,
165 Ohio St.3d 1424, 2021-Ohio-3730, 175 N.E.3d 571.
{¶48} If Appellants’ intent was not to be personally bound, then they should have
crossed out certain provisions or asked to change the lease terms. Alternatively, they
could have looked elsewhere for a different space to rent. Naming the LLC members as
the tenant is not customary, but this is what the plain language of the leases state. It is
not our function to rewrite the lease terms to what we think the parties meant. Instead,
we must apply it as written.
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{¶49} As for Appellants’ second argument, we disagree that the manner in which
Edward and Kimberly signed the contracts dictates their responsibility under the lease
agreements. While the way they signed is relevant, it does not override the otherwise
clear contract language defining “Tenant” as the LLC members and stating Edward and
Kimberly were personally guaranteeing the obligations of the lessee. Thus, this argument
lacks merit.
{¶50} It is possible Edward and Kimberly inadvertently bound themselves based
on their failure to read what they were signing or failure to secure counsel to review the
agreements. Regardless of the reason, this court must enforce the agreements as written
consistent with the plain language. Upon doing so, we find Kimberly personally
responsible for all outstanding lease payments due under both leases and Edward liable
for the lease payments associated with the second lease dated September 1, 2009,
regarding Suites B, D, and E, joint and several with Kimberly.
{¶51} Thus, Appellants’ arguments, listed as their first three assigned errors, lack
merit.
{¶52} However, to the extent the trial court found C&C responsible for the
judgment, we disagree. Further, to the extent the trial court found Edward responsible
for the rent associated with the lease signed in the year 2008 we likewise disagree. As
is further detailed under assignment of error number four, we do not find Edward
responsible for damages arising from the lease agreement that he did not sign.
{¶53} However, because the damage award is not readily divisible based on the
record, we remand for the limited purpose of determining which part of the judgment is
joint and several and flowing from the 2009 lease, and which part of the judgment arises
from the 2008 lease, such that it is Kimberly’s sole responsibility.
Statute of Frauds and the Statute of Conveyances
{¶54} Appellants’ fourth assignment contends:
“The trial court erred when it found that the Statute of Frauds and the Statute of
Conveyances did not preclude the enforceability of the leases against Kim and Ed
Lisowski.”
{¶55} Appellants assert the lease agreements are unenforceable since both
violate the statute of frauds and statute of conveyances.
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{¶56} The statute of conveyances requires all leases lasting three years or more
to be acknowledged and witnessed by an official, such as a notary public. R.C.
5301.01(A); R.C. 5301.08. Both lease agreements here were for a term of 2.5 years, and
thus, the statute of conveyances is inapplicable. Id.{¶57} Further, once the 2.5-year lease terms expired, the leases became month-
to-month leases. See generally Baer v. Hendren, 2017-Ohio-6933, 94 N.E.3d 1156, ¶ 18
(3rd) Dist.) (when a lease is deemed invalid and requires monthly payments, it creates a
tenancy from month to month); Wineburgh v. Toledo Corporation, 125 Ohio St. 219, 222,
181 N.E. 20 (1932); Burger v. Buck, 11th Dist. Portage No. 2008-P-0041, 2008-Ohio-
6061, ¶ 39. Thus, we find no violation of the statute of conveyances and conclude this
aspect of Appellants’ fourth assigned error lacks merit.
{¶58} Appellants additionally contend that neither lease agreement is enforceable
against them because Kimberly signed only in her representative capacity and Edward
only signed one of the two agreements, also indicating he was signing as a member and
in his representative capacity. Further, Appellants aver the only lease Edward signed
shows he signed the lease as a witness. Thus, they claim the statute of frauds invalidates
both agreements. We disagree in part.
{¶59} Ohio’s statute of frauds is codified in Chapter 1335 of the Ohio Revised
Code. The statute of frauds requires certain contracts to be in writing.
{¶60} R.C. 1335.04 provides: “No lease * * * shall be assigned or granted except
by deed, or note in writing, signed by the party assigning or granting it, or his agent
thereunto lawfully authorized, by writing, or by act and operation of law.”
{¶61} R.C. 1335.05 states in part, “[n]o action shall be brought * * * upon a contract
or sale of lands * * * or interest in or concerning them * * * unless the agreement upon
which such action is brought * * * is in writing and signed by the party to be charged
therewith or some other person thereunto by him or her lawfully authorized.”
{¶62} “Agreements that do not comply with the statute of frauds are
unenforceable.” Qutifan v. Shafiq, 2016-Ohio-4555, 70 N.E.3d 43, ¶ 13 (10th Dist.), citing
Hummel v. Hummel, 133 Ohio St. 520, 14 N.E.2d 923 (1938). The purpose of the statute
of frauds is to ensure that transfers of real property are reliable and to discourage
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fraudulent claims. N. Coast Cookies, Inc. v. Sweet Temptations, Inc., 16 Ohio App.3d
342, 348, 476 N.E.2d 388 (8th Dist.1984).
{¶63} A review of the lease agreements signed by Edward and Kimberly shows
both define the tenants as “Concepts & Creativity LLC Members dba Dance Studio,
hereinafter referred to as ‘Tenant’.” (Emphasis added.) Thereafter, both lease
agreements state they are personally guaranteed by Edward and Kimberly Lisowski.
Both leases additionally identify Edward and Kimberly Lisowski as contacts when
identifying tenants for official notices and demands regarding the contract.
{¶64} The fact that Edward signed the lease on the third blank space under the
heading for “Witnesses” does not invalidate his contractual obligations or make his
signature invalid. To the contrary, it appears likely that the lines under the term “Tenant”
had evidently already been used by Kimberly when signing the lease. And Edward signed
on the blank line across from her signature on the left-hand-side of the page, albeit under
the Witness heading, a day later. Further, there are two lines for witnesses above his
signature and under the Witness heading which remain blank.
{¶65} Consequently, the manner or the way in which Edward signed his name
does not invalidate the plain language of the contract.
{¶66} The same also applies to Kimberly. While her signature indicates she was
signing as a member of C&C, her signature is consistent with the way the word Tenant is
defined in the lease agreements.
{¶67} Notwithstanding, Appellants’ argument about the statute of frauds has merit
in part. Edward should not be found a party to and responsible for the 2008 lease that
names him as a party, but which he did not sign. We are not invalidating this lease, but
finding it is unenforceable against Edward since he did not sign it. Thus, this assigned
error has merit in part.
Trial Court Interference
{¶68} Appellants’ fifth alleged error claims:
“The trial court abused its discretion when it improperly interfered with defense
counsel’s cross examination and precluded Defendants from introducing relevant
evidence of Terrill Vidale’s motives, actions and statements.”
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{¶69} Appellants claim the trial court’s behavior during trial was an abuse of
discretion and caused their case to fail on the merits. They claim the trial court improperly
precluded defense from cross-examining Vidale based on its interjections and
independent questioning of the witness mid-trial when there were no objections. Appellee
argues the court’s conduct was reasonable case flow control.
{¶70} Evid.R. 614 states in part:
(B) Interrogation by Court. The court may interrogate witnesses, in an
impartial manner, whether called by itself or by a party.
(C) Objections. Objections to the calling of witnesses by the court or to
interrogation by it may be made at the time or at the next available
opportunity when the jury is not present.
{¶71} Appellants did not object to the court’s questioning about which they now
claim was error. Thus, they waived all but plain error, which may only be recognized in
extremely rare instances when the error seriously affects the basic fairness, integrity,
reputation, or legitimacy of the judicial process. Vermeer of S. Ohio, Inc. v. Argo Constr.
Co., 144 Ohio App.3d 271, 275, 760 N.E.2d 1 (2001).
{¶72} Further, the trial court has discretion to control the flow of the trial. Evid.R.
611(A), “Control by Court” states:
The court shall exercise reasonable control over the mode and order of
interrogating witnesses and presenting evidence so as to (1) make the
interrogation and presentation effective for the ascertainment of the truth,
(2) avoid needless consumption of time, and (3) protect witnesses from
harassment or undue embarrassment.
{¶73} Courts are afforded greater flexibility when questioning witnesses during
bench trials since there is no jury to be influenced by the judge’s demeanor. State v.
Skerkavich, 8th Dist. Cuyahoga No. 105455, 2019-Ohio-4973, 149 N.E.3d 1120, ¶ 16.
Further, a trial court's interrogation of a witness is not necessarily improper or one-sided
because it elicits evidence that is damaging to one of the parties. Henry v. Richardson,
12th Dist. Butler No. CA2010-05-110, 193 Ohio App.3d 375, 2011-Ohio-2098, 951 N.E.2d
1123, ¶ 24.
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{¶74} Here, Appellants claim they were prevented from eliciting testimony about
Vidale’s alleged motive to lie. They claim the court’s interruption of their cross-
examination of Vidale did not allow them to secure essential testimony about his allegedly
false statements in his bank loans. Appellants claim he had motive to lie and retract his
alleged promises to allow them to remain in the building rent free.
{¶75} Appellants’ cross-examination of Vidale included the following exchange:
Q * * * Did you take out a loan to buy this property?
A Yes.
Q And you took that loan out from a banking institution; right?
A Correct.
Q And as part of that you had to make representations to them as to what
rent you were receiving; is that right?
A A rent (indiscernible); correct.
Q Right. So if you were to not be receiving rent for a space then that would
be a misrepresentation you would have made at the time of the application
for a loan; right?
THE COURT: Wow. Not even an issue right now.
THE WITNESS: Yeah, I'm -- where is this going?
***
THE COURT: I'm sorry?
MR. KURZ: It goes to motive, Judge.
THE COURT: Motive for what, Attorney Kurz?
MR. KURZ: For making a representation that there was rent to be paid
when it wasn't.
THE COURT: To a party that is not here on a mortgage that is not in issue
with evidence that I don't have before me. So I'm not sure how that's helpful.
(Trial Tr. 70-71.)
{¶76} Appellants claimed they were prevented from showing Vidale had a motive
to lie about a promise to give them free rent, which allegedly contradicted assurances
made in loan documents. Appellants assert they were prevented from presenting
evidence about this alleged motive. We disagree.
Case No. 23 MA 0052
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{¶77} Although the trial court seemed to interject its disapproval of this question
and its relevance, it still allowed counsel to explain what he was seeking to establish.
Thereafter, the court did not prevent him from introducing evidence or eliciting testimony
in any manner. Further, there was no jury to be impacted by the court’s commentary.
Thus, they fail to establish plain error. Accordingly, this assigned error is overruled.
Damages Testimony
{¶78} Appellants’ sixth assignment of error claims:
“The trial court abused its discretion when it permitted Plaintiff to introduce
inadmissible hearsay to prove damages for repairs and trash removal.”
{¶79} Appellants generally challenge the court’s basis for its damage award.
Damages for a breach of contract should place the injured party in as good a position as
it would have been in but for the breach. These “expectation damages” are limited to the
plaintiff’s actual loss, which the plaintiff must establish with reasonable certainty. Textron
Fin. Corp. v. Nationwide Mut. Ins. Co., 115 Ohio App.3d 137, 144, 684 N.E.2d 1261 (9th
Dist.1996), citing Doner v. Snapp, 98 Ohio App.3d 597, 601, 649 N.E.2d 42 (1994).
{¶80} Appellants claim the court erred by allowing the introduction of an exhibit
into evidence showing the amount Appellee paid to clean and restore the property. They
claim Vidale should not have been allowed to testify as to what work was done since he
neither performed the work, nor was he present when it was performed. Thus, they claim
his testimony is hearsay. We disagree.
{¶81} Trial courts generally have broad discretion in the admission of evidence,
which we review for an abuse of discretion. State v. Jordan, 10th Dist. Franklin No. 06AP-
96, 2006-Ohio-6224, ¶ 19.
{¶82} Contrary to Appellants’ argument, Vidale testified that he personally hired
someone to clean out the units and repair the drywall. He paid them $1,800, which is the
amount reflected in Exhibit D. (Trial Tr. 65-66.) Thus, this is not an out of court statement
offered for the truth of the matter of asserted, but in court testimony by an individual with
knowledge as to what his company paid. Thus, this was not hearsay. Evid.R. 801(C).
{¶83} As for the alleged work done to repair the damaged drywall and trash
removal, Appellee introduced photographs depicting the condition of the units after
Appellants vacated the premises. Vidale testified he took the photographs and they
Case No. 23 MA 0052
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accurately depicted the property’s condition, including the trash and furniture left behind.
(Trial Tr. 59-62; Exhibit D.) While he did not recall whether the mirrors were still hanging
at the time Appellants vacated the premises, this does not preclude his recovery of this
aspect of his claim. It is reasonable to conclude that the removal of the mirrors was
warranted before Vidale rented the space to another.
{¶84} Furthermore, the only evidence to the contrary, was Semple’s testimony.
She testified that when Appellants vacated the property, the mirrors were still adhered to
the walls, but she confirmed the photographs did otherwise depict the units in the
condition when Appellants vacated the property. Further, when she reviewed one of the
photographs in Exhibit D, Semple opined it did not depict damage to the drywall. Instead,
she claimed the walls only needed painted, not drywall repair work. (Trial Tr. 117, 125-
126.)
{¶85} The foregoing testimony and evidence about the damage was before the
court for it to consider when determining its damage award. Based on the record, we find
no error. Accordingly, this assigned error lacks merit.
Seventh, Eighth, & Ninth Assignments of Error
{¶86} Appellants’ seventh assigned error contends:
“The court’s decision was in error as it was against the manifest weight of the
evidence.”
{¶87} Appellants’ combined assignments of error eight and nine assert:
“The trial court erred and abused its discretion when it (VIII) granted damages for
normal wear and tear; and (IX) failed to apply Defendants’ deposits against the award of
damages.”
{¶88} Because Appellants’ arguments in these assignments overlap, we address
them collectively.
{¶89} Appellants first assert there were no witnesses to testify who were present
when the leases were signed about the contract ambiguity, and as such, the court’s
decision is against the weight of the evidence. However, because we find the lease
unambiguous, this contention is of no consequence since the plain language of the lease
agreements dictates the outcome.
Case No. 23 MA 0052
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{¶90} Next, Appellants claim Attorney McNally’s testimony about the contract and
his interpretation of it is correct. Again, however, procuring the plain meaning of a written
instrument is a question of law for the court to decide. Alexander v. Buckeye Pipeline
Co., 53 Ohio St.2d 241, 245, 374 N.E.2d 146 (1978). Thus, his opinion about the validity
of the leases or in what capacity Appellants signed the agreements, has no impact on our
decision. Id.{¶91} Appellants also claim error based on alleged inconsistent allegations in
Appellee’s complaint versus what was established at trial. Specifically, Appellants assert
Appellee’s damages should not be allowed to exceed those claimed in Appellee’s
complaint. They also raise a factual discrepancy about the name of Unit 0, which was
later identified as Unit N.
{¶92} A plaintiff’s complaint must generally plead sufficient operative facts to
support recovery for his or her claims. Tuleta v. Med. Mut. of Ohio, 8th Dist. Cuyahoga
No. 100050, 2014-Ohio-396, 6 N.E.3d 106, ¶ 12. A general averment about the damages
does not preclude more specific trial testimony.
{¶93} Regarding the amount of cleanup costs associated with Appellants’ units,
Appellee’s complaint alleges it incurred “approximately $1,000” for cleaning and other
costs to remediate the units. This allegation was in the complaint and is consistent with
the evidence offered at trial. Further, the discrepancy about the name of the rental unit
was raised at trial, adequately explained, and the court found the issue was of no
consequence. These arguments lack merit.
{¶94} Appellants next claim the court erred by awarding normal wear and tear
damages under the lease agreements. This issue was not raised during trial, there is no
evidence or argument on the issue, and it is therefore waived. Quick v. Jenkins, 7th Dist.
Columbiana No. 13 CO 4, 2013-Ohio-4371, ¶ 27, citing Litva v. Richmond, 172 Ohio
App.3d 349, 2007-Ohio-3499, 874 N.E.2d 1243, ¶ 18 (7th Dist.). Notwithstanding, Vidale
testified he paid someone $1,800 to clean Appellants’ unit, and Appellee introduced
photographs depicting garbage left behind and damaged drywall. Thus, this argument
lacks merit.
{¶95} Appellants also claim the court failed to apply the deposits under both lease
agreements. We disagree. The trial court deducted the amount of both deposits when
Case No. 23 MA 0052
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calculating Appellee’s damage award in the Damages section of its decision. (March 17,
2023 Judgment.) Thus, this argument lacks merit.
{¶96} Finally, Appellants complain the trial court erred by awarding Appellee
$2,100 per month in damages when the rent indicated in the lease agreements do not
equal that amount. Instead, the monthly total is $1,459.50 when adding the amounts in
the two lease agreements.
{¶97} “[J]udgments supported by some competent, credible evidence going to all
the essential elements of the case will not be reversed by a reviewing court as being
against the manifest weight of the evidence. C.E. Morris Co. v. Foley Constr. Co. (1978),
54 Ohio St.2d 279, 8 O.O.3d 261, 376 N.E.2d 578, syllabus.” Dugan & Meyers Constr.
Co. v. Ohio Dept. of Adm. Servs., 10th Dist. No. 03AP-1194, 162 Ohio App.3d 491, 2005-
Ohio-3810, 834 N.E.2d 1, ¶ 49, aff'd, 113 Ohio St.3d 226, 2007-Ohio-1687, 864 N.E.2d
68.
{¶98} The trial court’s judgment under “UNDISPUTED FACTS * * * d. Damages”
states: “The parties agree that at the time of the vacation of the premises, Defendants
were paying the amount of $2,100 per month for the combined space.” (March 17, 2023
Judgment.)
{¶99} Although there was no on the record agreement or stipulation to this fact,
Appellants did not challenge Vidale’s testimony that they owed him $2,100 per month in
lease payments or present evidence to the contrary. He testified to this fact twice. Vidale
testified he was to receive $2,100 per month from Appellants for collective rent for five
units. The lease agreements only list four units. He said he only received $1,400 for
July’s rent, which fell short of the $2,100 owed for that month. Thus, they still owed $700
for July of 2020 ($2,100 minus $1,400 is $700). There was no objection to this testimony.
Moreover, it is undisputed they did not pay for the months of August, September, and
October.
{¶100} As stated, McNally authenticated a ledger of amounts Appellants paid to
Canfield Properties in 2020. The ledger reflects payments in the amount of $2,100 for
January, February, March, April, and May. For the month of June 2020, the ledger
indicates “free rent.” And for July, the ledger reflects payments in the amount of $1,050.
Case No. 23 MA 0052
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(Trial Tr. 14-19; Exhibit C.) Thus, the ledger supports Vidale’s testimony that Appellants
were paying $2,100 per month total at the end of their lease term.
{¶101} The ledger introduced during Attorney McNally’s testimony reflects
Appellants paying $2,100 per month. This amount is incompatible with the lease
agreements. The two lease amounts equal $1,469.50 per month ($607 for lease B and
$862 for lease A during the first 2.5 years). Lease A states that after the expiration of the
initial 2.5-year lease term, the rent would increase to $927.19 per month. And $927.19
plus $607 equals $1,534.19.
{¶102} Yet, Appellants did not object to this testimony about the $2,100 per month
or the introduction of the ledger as an exhibit. They likewise did not introduce opposing
testimony tending to show the rent was limited to that explicitly contained in two lease
agreements. Notwithstanding, there were references in the parties’ testimony that
Appellants had leased an additional unit for a total of five units. This coupled with the
unobjected to and testimony and ledger show no error.
{¶103} Accordingly, the $2,100 lease payment amount is not against the manifest
weight of the evidence as it is supported by some competent, credible evidence. Thus,
this argument lacks merit, and this assignment of error lacks merit in its entirety.
{¶104} We note there is no testimony or evidence as to how the $2,100 is divisible
between the two lease agreements. Thus, because Edward is not responsible for the
lease payments associated with the 2008 lease agreement, we direct the trial court on
remand to determine what portion of the $2,100 monthly lease obligation was associated
with which lease when re-assessing damages.
Conclusion
{¶105} We affirm the trial court’s decision in part, reverse in part, and remand.
{¶106} We conclude Appellants’ argument about the statute of frauds has merit
in part. Edward should not be found a party to and responsible for the 2008 lease that
names him as a party, but which he did not sign.
{¶107} Further, this court finds Kimberly personally responsible for all outstanding
lease payments due under both leases and Edward only liable for the lease payments
associated with the second lease dated September 1, 2009, regarding Suites B, D, and
Case No. 23 MA 0052
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E, joint and several with Kimberly. We also find Appellants’ company, C&C, was not a
party to either lease agreement.
{¶108} On remand, the trial court is to re-assess the damages award and
determine which amount Edward and Kimberly should be found joint and several pursuant
to the 2009 lease and which amount is owed under the 2008 lease for which Kimberly is
solely responsible. In doing so, the trial court must determine which portion of the $2,100
monthly lease obligation was associated with each lease.
Waite, J., concurs.
Hanni, J., dissents with dissenting opinion.
Case No. 23 MA 0052
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Hanni, J., dissents with dissenting opinion.
{¶109} With regard and respect for my colleagues, I must dissent in part from the
majority opinion. I would find merit with Appellants’ first, second, third, and seventh
assignments of error. I would reverse the trial court’s judgment based on the merit of
these assignments of error.
{¶110} Regarding the first, second, and third assignments of error, the majority
concludes the leases are unambiguous and that Kimberly and Edward signed the leases
in their personal capacities. To the contrary, I would find that the lease terms are
ambiguous as to whether Kimberly and Edward signed the leases in their personal
capacities. Because of the ambiguity, I would construe the lease terms against the
drafter, in this case the lessor.
{¶111} Terms in a contract are ambiguous if their meanings cannot be determined
from reading the entire contract, or if they are reasonably susceptible to multiple
interpretations. First Natl. Bank of Pennsylvania v. Nader, 9th Dist. Medina No.
16CA0004-M, 2017-Ohio-1482, ¶ 25. When a contractual provision is ambiguous, that
provision is to be strictly construed against the drafter. Columbiana Cty. Bd. of Commrs.
v. Nationwide Ins. Co., 130 Ohio App.3d 8, 15, 719 N.E.2d 561 (7th Dist.1998), citing
McKay Machine Co. v. Rodman, 11 Ohio St.2d 77, 80, 228 N.E.2d 304 (1967).
{¶112} Both leases state they are being entered into “by and between” the
landlord and “Concepts & Creativity LLC Members dba Dance Studio, hereinafter referred
to as Tenant.” The majority finds that because there is no comma or “and” between the
terms “LLC” and “Members”, the leases do not identify the company as the tenant but
instead identify the members/Appellants as the tenants. Because the Appellants are the
tenants, the majority concludes they are personally liable on the leases.
{¶113} The majority also points to paragraph 22 of the leases in support of finding
Appellants personally liable. Admittedly, paragraph 22 states that Kimberly (in both the
2008 and the 2009 leases) and Edward (in the 2009 lease) personally guarantee the
performance of the lease. If Appellants had then signed the leases in their personal
capacities, I would likely agree with the majority that they are personally liable. But our
inquiry does not end here.
Case No. 23 MA 0052
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{¶114} As explained by our sister courts:
“The signature itself represents a clear indication that the signator is acting
as an agent if: (1) the name of the principal is disclosed, (2) the signature is
preceded by words of agency such as ‘by’ or ‘per’ or ‘on behalf of’, and (3)
the signature is followed by the title which represents the capacity in which
the signator is executing the document, e.g., ‘Pres.’ or ‘V.P.’ or ‘Agent.’”
Baltes Commercial Realty v. Harrison, 2d Dist. Montgomery No. 23177, 2009-Ohio-5868,
¶ 56, quoting George Ballas Leasing, Inc. v. State Sec. Serv., Inc., 6th Dist. Lucas No. L-
91-069, 1991 WL 280135 (Dec. 31, 1991), citing Spicer v. James, 21 Ohio App.3d 222,
223, 487 N.E.2d 353 (2d Dist.1985).
{¶115} In this case, the elements indicating that Kimberly and Edward signed the
leases as agents of the LLC, as opposed to in their personal capacities, are present.
{¶116} As to the 2008 lease, it was signed by Kimberly as follows:
TENANT
Mr. & Mrs.
dba Concepts & Creativity, LLC
BY: Member, Kimberly Lisowski
(Exhibit A). The italicized and underlined terms are handwritten in cursive. The other
words are typewritten.
{¶117} As to the 2009 lease, it was signed by Kimberly and Edward as follows:
TENANT
Mr. & Mrs.
dba
BY: Kimberly Lisowski
Case No. 23 MA 0052
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TITLE: member
(Exhibit B). Edward also signed this lease as “Edward Lisowski, Member” across from
where Kimberly signed. Again, the italicized and underlined terms are handwritten and
in cursive.
{¶118} In the 2008 lease, (1) the name of principal (“Concepts & Creativity, LLC”)
is disclosed; (2) the signature is preceded by a word of agency (“by”); and (3) the
signature includes the title (“Member”) that represents the capacity in which Kimberly is
signing.
{¶119} In the 2009 lease, the name of the principal is not listed. But the signature
page indicated that Kimberly and Edward are signing as agents because they signed their
names using a word of agency (“by”) and indicating their title (“Member”). Additionally,
the LLC is clearly identified earlier in the 2009 lease.
{¶120} Considering the leases as a whole, specifically paragraph 22 along with
the signature pages, I would conclude that they are ambiguous as to whether Appellants
gave their personal guarantee. Given this ambiguity, I would construe these terms
against the drafter/lessor. Thus, I would find that Kimberly and Edward were not
personally liable on the leases.
{¶121} Regarding the seventh assignment of error, the majority concludes the trial
court’s decision was supported by the weight of the evidence, including the finding that
the monthly rent was $2,100. I would find to the contrary.
{¶122} The monthly rental amounts in the two leases initially equaled $1,469 per
month ($607 for lease B and $862 for lease A during the first 2.5 years). Lease A states
that after the initial 2.5-lease term, the rent will increase to $927.19 per month. Thus, per
the terms of the leases for the months at issue (July, August, September, and October
2020), the total monthly rent was $1,534.19. Appellee did not introduce any evidence
that the parties executed an amendment or addendum to either lease to modify the
agreed monthly rent.
{¶123} Based on the foregoing, I would reverse the trial court’s findings that
Kimberly and Edward were personally liable and that the monthly rent was $2,100.
Case No. 23 MA 0052
[Cite as G.A.I. Capital Group v. Lisowski, 2023-Ohio-4802.]
For the reasons stated in the Opinion rendered herein, it is the final judgment and
order of this Court that the judgment of the Municipal Court of Mahoning County, Ohio is
affirmed in part, and reversed in part. We hereby remand this matter to the trial court for
further proceedings to determine which portion of the $2,100 monthly lease obligation
was associated with each lease according to law and consistent with this Court’s Opinion.
Costs to be taxed against the Appellee.
A certified copy of this opinion and judgment entry shall constitute the mandate in
this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a
certified copy be sent by the clerk to the trial court to carry this judgment into execution.
NOTICE TO COUNSEL
This document constitutes a final judgment entry.