DocketNumber: No. 08CA0014.
Citation Numbers: 2008 Ohio 6574
Judges: DICKINSON, Judge.
Filed Date: 12/15/2008
Status: Non-Precedential
Modified Date: 4/18/2021
{¶ 3} GMS sued Ms. Nguyen for the remaining 14 monthly lease payments, plus certain other damages to which it claimed to be entitled under the lease. Ms. Nguyen filed a counterclaim in which she sought damages she allegedly suffered as a result of the leaks during the time she occupied the space.
{¶ 4} Following a bench trial, the trial court determined that neither party was liable to the other. It held that Ms. Nguyen had failed to present "relevant, competent, and credible evidence" in support of her counterclaim, that the damages GMS sought beyond the monthly lease payments amounted to an unenforceable penalty, and that Ms. Nguyen was relieved from the obligation to pay the remaining 14 monthly lease payments because GMS had constructively evicted her. GMS has appealed the trial court's determination that Ms. Nguyen is not liable for the remaining monthly lease payments and its determination that she is not liable for damages beyond those payments.
{¶ 6} The first lease provision relied upon by GMS is subpart (F) of Section 38. Section 38 deals with various possible defaults by Ms. Nguyen and says that, in the event of a default, GMS may "re-enter the Premises by summary proceedings or otherwise, and may dispossess the Tenant. . . ." Subpart (F) provides, among other things, that, "[i]n the event of *Page 3 such re-entry, the balance of the rent and other charges to become due during the Term of this Lease shall be accelerated and shall be immediately due and payable. . . ." Based on that part of subpart (F), GMS has argued: "Thus, there is no question that Tenant remains liable for all rent for the remainder of the term." Subpart (F) only becomes relevant, however, if the tenant has defaulted under the lease. Inasmuch as the trial court found that Ms. Nguyen properly terminated the lease because she was constructively evicted, subpart (F) of Section 38 is of no assistance to GMS.
{¶ 7} GMS has next cited subpart (F) of Section 8 of the lease as support for the idea that the trial court incorrectly failed to award it damages in addition to the monthly lease payments it claimed Ms. Nguyen owed. This subpart (F) provides that the shopping center is an "inter-dependent enterprise and its success is dependent upon the opening and continued operation of [Ms. Nguyen's] business in accordance with the terms of this Lease." It further provides that, if Ms. Nguyen should "vacate, abandon, or desert the Premises," GMS's damages will be difficult or impossible to determine and that, unless GMS terminates the lease, Ms. Nguyen "shall pay to [GMS], in addition to fixed and additional rent, 1/15th of the monthly installment of fixed rent for each day the Premises and [Ms. Nguyen's] business therein are not continuously and uninterruptedly operated by [Ms. Nguyen]."
{¶ 8} As mentioned previously, the trial court determined that the damages GMS sought beyond the monthly lease payments amounted to an unenforceable penalty. GMS's entire argument to this Court regarding its claimed entitlement to additional damages under Section 8(F) consists of three sentences: "[T]he lease also provided for additional damages in the event that [Ms. Nguyen] improperly vacated the Premises. . . . Thus, when [Ms. Nguyen] improperly *Page 4 vacated the Premises, [she] was in default and became liable for additional damages. These damages are in addition to the normal base rent."
{¶ 9} While contractual liquidated damage clauses are enforceable, penalties are not. "The test of whether a contractual provision is a valid liquidated damages provision or a penalty is whether the objective of the provision is reasonable compensation for actual damages." USSGreat Lakes Fleet Inc. v. Spitzer Great Lakes LTD.,
{¶ 10} The next lease provision relied on by GMS is subpart (B) of Section 41. That subpart provides that, if GMS breaches any of its obligations under the lease, Ms. Nguyen is not entitled to terminate the lease or file a claim for constructive eviction and that, rather, "[her] exclusive remedy shall be limited to monetary damages or injunctive relief." According to GMS, the trial court's determination that Ms. Nguyen legitimately terminated the lease in response to GMS's constructive eviction "was clearly in error in light of the plain and unambiguous language of the Lease."
{¶ 11} The question of whether a provision in a commercial lease waiving a tenant's right to claim constructive eviction is enforceable is interesting. In Leider v. 80 William St. Co. Inc.,
{¶ 12} Further, and just as importantly, GMS has failed to direct this Court to any point in the record at which it brought Section 41(B) to the trial court's attention and, having thoroughly reviewed that record, this Court has been unable to find any mention of that subpart. While GMS has argued that the trial court erred by "ignoring the plain and unambiguous lease language," at least in regard to Section 41(B), the trial court's ignoring of the lease language is understandable in light of GMS's own ignoring of that language.
{¶ 13} A party who fails to call a claimed error to the trial court's attention at a time when it can be avoided or corrected forfeits the right to argue that error on appeal. State v. Williams,
{¶ 14} GMS has next cited Section 52 of the Lease: "The Tenant shall have no right to quit the Premises, cease to operate its business, cancel or terminate this Lease except as said right *Page 6 is expressly granted to the Tenant herein." GMS did draw the trial court's attention to that section, although it did not argue that it prevented Ms. Nguyen from terminating the lease based upon GMS's constructive eviction of her. Rather, it appeared to argue just the opposite, stating that whether Ms. Nguyen had been constructively evicted was a question of fact: "Which then brings us to section 52 at page 40 where there's a provision concerning termination where it indicates that tenant shall have no right to quit the premises, cease to operate his business, cancel or terminate this lease except as the right is expressly granted to the tenant herein. Which I don't believe is granted under these circumstances, again it is obviously a question of fact for Your Honor. Finally, I do have a case that I would provide a copy to counsel and for the Court if I could approach, part of the 11th Appellate District that addresses some of the commercial lease, got an HVAC system and so forth. You know, in terms of a constructive eviction I don't think we have that here." Having failed to argue to the trial court that Section 52 prevented Ms. Nguyen from claiming she had been constructively evicted, GMS forfeited the right to make that argument on appeal.
{¶ 15} The final lease provision relied on by GMS is subpart (A) of Section 21. GMS has correctly pointed out that, under that subpart, Ms. Nguyen was responsible for maintenance of the HVAC system that served the leased space, the front window frame, and the front window. According to GMS, the ceiling leak was caused by the HVAC. The record, however, supports no such conclusion. Although GMS's maintenance man testified that the ceiling leak was in the vicinity of the air conditioning unit, he never suggested it was caused by the air conditioning unit. In fact, he seemed to speculate that the leak in the space's flat roof was caused by heat: "And he showed me some areas where I guess when the heat heat up and the tar raise up and it was somewhere water was getting in there." Further, there was no suggestion that the *Page 7 leak at the front window was caused by poor maintenance of either the window or its frame. Rather, the maintenance man testified that it was caused by the repeated freezing of a drain pipe, which GMS finally replaced after Ms. Nguyen vacated the premises: "[I]t's a drain pipe — the last drain pipe before it go down to the sewer line. And every year we put heat tape in there to keep the pipe from freezing. And every so often when we get a bad wind storm or snow storm when it's coming through that pipe freezes. And when that pipe freezes we get water come down the canopy and down 1855 front window and stuff and it had a little water damage there." Subpart (A) of Section 21 is of no assistance to GMS.
{¶ 16} None of the lease provisions cited by GMS support its argument that the trial court erred by determining that Ms. Nguyen properly terminated the lease agreement based on constructive eviction. GMS's first assignment of error is overruled.
{¶ 18} The remainder of GMS's argument in support of its second assignment of error appears to relate to Ms. Nguyen's counterclaim. The trial court ruled against her on her counterclaim, and she has not appealed. It is unclear, therefore, why GMS has presented this argument. GMS's second assignment of error is overruled.
Judgment affirmed.
The Court finds that there were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Wayne, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App. R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App. R. 22(E). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App. R. 30.
*Page 11Costs taxed to appellant.
WHITMORE, J., CONCURS.
*Page 1SLABY, P. J., CONCURS IN JUDGMENT ONLY.