Continental Ents., Ltd. v. Franklin

[Cite as Continental Ents., Ltd. v. Franklin, 2016-Ohio-3055.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 102899
CONTINENTAL ENTERPRISES, LTD.
PLAINTIFF-APPELLANT
vs.
MYRON FRANKLIN, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED
Civil Appeal from the
Shaker Heights Municipal Court
Case No.13-CVG-01306
BEFORE: Laster Mays, J., Keough, P.J., and E.T. Gallagher, J.
RELEASED AND JOURNALIZED: May 19, 2016
-i-
ATTORNEY FOR APPELLANT
Ted S. Friedman
32901 Station Street, Suite 105
Solon, Ohio 44139
ATTORNEYS FOR APPELLEES
Gary Cook
3800 Lakeside Avenue, Suite 400
Cleveland, Ohio 44114
Michael Aten
17529 Madison Avenue, Suite 211
Lakewood, Ohio 44107
ANITA LASTER MAYS, J.:
{¶1} Plaintiff-appellant Continental Enterprises, Ltd. (“Continental”), appeals
the trial court’s finding for defendants-appellees Myron Franklin (“Myron”) and Tracy
Cloud Franklin (“Tracy”) (collectively the “Franklins”), determining that Continental’s
retaliatory conduct served to terminate the residential lease between the parties. The trial
court also dismissed Continental’s counterclaims, ordered that the clerk of courts release
the funds that the Franklins placed in rent escrow to Continental, and granted a judgment
to Continental in the amount of $220.
{¶2} Continental provides a single assignment of error, that the trial court erred
in concluding that Continental engaged in retaliatory conduct as prohibited by R.C.
5321.02. We disagree and affirm the trial court’s decision.
I. BACKGROUND AND FACTS
{¶3} Alan Pearlman (“Pearlman”) is the property manager and sole owner of the
Continental apartments complex. The Franklins’ leased an apartment (“Unit”) for a
one-year term beginning October 1, 2012, and ending September 30, 2013. The lease
contained a provision that automatically renewed for an additional year if the tenants
failed to provide written notice at the designated post office box address at least 60 days
prior to the expiration date. Interaction between the parties was primarily by email.
{¶4} On October 24, 2013, Pearlman emailed the Franklins asking that they call
him regarding installation of washers and dryers in the apartment units, followed by an
October 25, 2013 email stating that a workman would enter their Unit to determine where
the water line holes would be drilled and an October 26, 2013 notification that
Continental would enter the Unit on October 28, 29, and/or 30, 2013, to drill holes in the
floor and ceiling of one of the guest bedroom closet areas. The Franklins responded the
morning of October 28, 2013, that they had been out of the country, had just received the
email and would clear out the closet later that day so the contractors could enter the next
day or one day the following week. Pearlman emailed later that afternoon that Continental
had entered the Unit and the work had been performed.
{¶5} In an October 29, 2013 email to Pearlman, the Franklins expressed their
dismay that the contractors entered the apartment in spite of their objection, and left dust
on the furniture and surroundings and otherwise left the area in disarray. The Franklins
also stated that they had previously expressed their dissatisfaction with apartment
maintenance issues, requested that Pearlman provide an estimated completion date for the
project, and took issue with the lack of proper notice for access to the Unit. Pearlman
did not respond.
{¶6} On October 30, 2013, the Franklins emailed the City of Shaker Heights
Housing Department (“City”) complaining that: (1) Continental entered the Unit without
proper scheduling and failed to clean up debris, leaving the living space unusable until
final project completion, a projected date for which Continental refused to provide; (2)
rust had been leaking from the building roof onto their vehicles that were parked in their
assigned spaces in the parking garage, and Continental refused to reassign their parking to
a non-leaking area; and (3) Continental’s lack of responsiveness in making repairs. On
the second point, the Franklins identified a problem with moisture entering the brick
exterior of the building, causing discoloration to the Unit walls that the maintenance man
stated required tuck-pointing and mortar, but no efforts to repair had been made. The
next day, the Franklins asked the City whether they could place their rent in escrow
pending completion of the repairs.
{¶7} The City inspected the premises and issued code violation notices on
November 4, 18, and December 9, 2013. On November 14, 2013, Pearlman provided
email notification to the Franklins that a painter would enter their Unit at 8:00 a.m. the
next morning to:
make the minor repair to your living room wall as a result of your calling to
complain to the City of Shaker Heights Housing Department. You will
need to move your possessions out of the way before my painters arrive. I
have reviewed your recent emails and neither of you ever mentioned any
water damage to your living room wall. I guess I am supposed to be a
mind reader when it comes to making repairs in your apartment. You must
be disappointed when the inspector found only one item that needed to be
repaired.
{¶8} A series of emails were exchanged the next day with the Franklins objecting
to the short notice and Pearlman stating that his employee, “James” would see them at
“4:26:01 P.M.” Pearlman further informed them that a carpenter would enter their Unit
within the next day or two, on Saturday or Sunday, to frame the closet and directed that
they move their possessions out of the way. The Franklins replied that they had guests
using the guest room that weekend but that work could begin that Monday. They also
copied the City and reminded Pearlman that his actions were “moving towards
harassment.”
{¶9} Pearlman replied that the work would be performed anyway and thanked the
Franklins for the Ohio Landlord Tenant Law advice. The same day, Pearlman notified
the Franklins that contractors would be working in several units, including the Franklins,
the next week from Monday through Friday between 8:00 a.m. and 5:00 p.m. as needed.
The morning of Saturday, November 16, 2013, Pearlman advised the Franklins that the
carpenter had to go out of town so carpentry work would begin on Sunday.
{¶10} Pearlman subsequently admonished the Franklins for allegedly preventing
his workers from entering their Unit during the weekend of November 16, 2013. They
were informed that their Unit would be completed “whenever it gets done,” and warned
that, if they prevented entry again, the police would be summoned to enforce access.
{¶11} The Franklins advised Pearlman on November 18, 2013, that the Unit was
available to access that week, including Saturday if needed. They reiterated their request
for an estimated date of completion. A copy was directed to the City. On November 23,
2013, Pearlman emailed that contractors would enter their Unit, as needed, on Monday,
Tuesday, and Wednesday to install water and drain lines. The Franklins thanked him for
the notice and informed Pearlman that they would be entertaining their family from
November 27, 2013, through Monday, December 2, 2013, for the Thanksgiving holiday
and asked that Pearlman honor their observation of Sundays as a religious holiday. They
stated that anytime after December 2, 2013, with proper notification, access would not be
a problem.
{¶12} Pearlman responded that access was required on December 2 as well as
through December 6, 2013, as needed, from 8:00 a.m. to 5:00 p.m. and warned the
Franklins that a refusal to grant access would result in Pearlman’s calling the police to
force access. On December 3, 2013, Pearlman emailed that in light of the Franklins’
denial of access on December 2, 2013, the contractors would leave the water and drain
lines exposed if the Franklins continued to “play games.” The Franklins denied
Pearlman’s assertion.
{¶13} Also, on December 3, 2013, Pearlman emailed the Franklins and several
other tenants that they had failed to pay December 2013 rent and that their rent was to be
placed in the rental office door mail slot per the lease requirements. The Franklins
responded that their rent check had been placed in a sealed envelope, accompanied by a
notice to Pearlman, and placed in the payment slot on November 30, 2013.
{¶14} The notice referenced in the email was a November 30, 2013 letter
addressed to Pearlman entitled “notice to correct conditions.” The notice advised that
the Unit had been rendered unsafe and uninhabitable due to the unfinished washer and
dryer installation project instituted on October 28, 2013. It further advised that failure to
resolve the issues within a reasonable amount of time “may result” in rent escrow with the
court. Pearlman replied that he had not received the envelope and suggested that the
Franklins issue a replacement check.
{¶15} Pearlman refused the Franklins offer to meet with Pearlman to provide the
replacement check and obtain a receipt, and advised them that they now owed a $30 late
fee. On December 6, 2012, Pearlman emailed the Franklins that he had just discovered
the deposited envelope because it was under the shelving in the office:
The envelope was pushed into the mail slot with extra force causing it not to
drop into the collection box. Your check will be deposited today. As far as
your letter is concerned, your apartment is not uninhabitable. You have
prevented us from entering your apartment on at least 5 occasions. Your
threat to escrow your monthly rent payment does not bother me as the legal
process will work both ways.
{¶16} The Franklins informed him that a stop payment had been put on the
check based on Pearlman’s suggestion and allegation that the check had not been received
and, in light of his refusal to meet and issue a receipt, the replacement check was sent to
the post office box stated in the lease. Pearlman admonished that they were not to send a
check to the post office box and stated they should contact their bank to rescind the stop
payment on the initial check or they would also owe a returned check fee. He further
admonished that they were not supposed to send any payments to the post office box
address, and said:
Let me make this as simple as possible for you. If I do not receive an
official bank check by noon tomorrow for $1,315.00 (includes $30.00 late
fee and $30.00 returned check fee). I will instruct my attorney to file a
lawsuit against you. Thank you.
{¶17} The installation project was not yet complete and, on December 7, 2013,
Pearlman advised the Franklins that contractors would enter the Unit to work on the
washer and dryer installation from December 9 through 13, 2013. The installation would
subsequently be inspected and, upon approval, followed by closing of the guest bedroom
wall and opening the wall in the hallway.
{¶18} Pearlman filed a complaint against the Franklins on December 16, 2013,
in the Shaker Heights Municipal Court on December 16, 2013 for “failure to pay
December 2012 rent of $1,255.00 plus late fee at $30.00 plus returned check fee of 30.00.
Failure to pay January 2013 rent of $1,255.00 plus late fee of $30.00.” The complaint
was amended on December 20, 2013, to reflect failure to pay rent and fees for December
2013 and January 2014.
{¶19} On December 31, 2013, the Franklins initiated their rent deposit with the
court as stated in their prior notice. The Franklins denied the complaint allegations on
January 8, 2014, and counterclaimed for breach of the covenant of quiet enjoyment,
partial constructive eviction, breach of the implied warranty of habitability, violation of
R.C. 2323.51 for filing a frivolous claim, libel, and retaliation under R.C. 5321.02. The
Franklins vacated the Unit on January 31, 2014.
{¶20} Continental filed a third amended complaint on February 7, 2014, seeking
rent through September 30, 2014, based on the renewal clause of the lease, late fees,
turnover costs, and property damage. A bench trial ensued and written closing
statements submitted. Copies of the email exchanges and photographs depicting the Unit
during and after occupancy were also offered into evidence.
{¶21} On April 13, 2015, the trial court issued a Decision and Judgment Entry
finding by a preponderance of the evidence that Continental engaged in retaliatory
conduct in violation of R.C. 5321.02. The trial court determined that the Franklins
lawfully exercised their right to terminate their rental agreement so the lease did not
extend through September 2014, that the apartment was in good condition at the time they
vacated, and the washer and dryer installation was still incomplete so there was no
entitlement to damages.
{¶22} The trial court also pointed out that there had never been a problem with
the receipt of rent until December 2013, after the Franklins complained to the City, and
after Pearlman actually received the notice of intent to escrow. Continental filed the
complaint for the December rent and fees, as well as the January 2014 rent that was not
yet due. The trial court concluded that the Franklins lawfully exercised their right to
terminate the lease under R.C. 5321.07, and that Pearlman had engaged in retaliatory
conduct in violation of R.C. 5321.02.
{¶23} Pearlman was awarded $220 rent for December 2013 and rent of $1,255
for January 2014. The security deposit was applied as well as the $1,255 in escrow with
the court, constituting payment in full of the January 2014 rent obligation. Final
judgment was awarded to Continental in the amount of $220. The remaining claims by
the parties were denied.
II. ASSIGNMENT OF ERROR
{¶24} Continental contends that the trial court erred when it concluded that
Continental engaged in retaliatory conduct prohibited by R.C. 5321.02. We disagree.
III. STANDARD OF REVIEW
{¶25} We apply a manifest weight standard of review when reviewing civil
appeals from bench trials. Seasons Coal v. Cleveland, 10 Ohio St.3d 77, 461 N.E.2d
1273 (1984). The guiding presumption is that the trial court’s findings were correct.
This Court will not reverse its decision as against the manifest weight of the evidence
except “if it is supported by some competent, credible evidence going to all the essential
elements of the case.” Seasons Coal at 80, quoting C.E. Morris Co. v. Foley Constr. Co.,
54 Ohio St.2d 279, 376 N.E.2d 578 (1978), syllabus. But despite this deferential
standard of review, “a finding of an error in law is a legitimate ground for reversal.”
Seasons Coal at 79. See also N. Shore Auto Fin., Inc. v. Block, 188 Ohio App.3d 48,
2010-Ohio-2447, 934 N.E.2d 381, ¶ 8 (8th Dist.)
IV. LAW AND ANALYSIS
{¶26} R.C. 5321.02 provides:
(A) Subject to section 5321.03 of the Revised Code, a landlord may not
retaliate against a tenant by increasing the tenant’s rent, decreasing
services that are due to the tenant, or bringing or threatening to bring an
action for possession of the tenant’s premises because:
(1) The tenant has complained to an appropriate governmental agency of a
violation of a building, housing, health, or safety code that is applicable to
the premises, and the violation materially affects health and safety;
(2) The tenant has complained to the landlord of any violation of section
5321.04 of the Revised Code;
(3) The tenant joined with other tenants for the purpose of negotiating or
dealing collectively with the landlord on any of the terms and conditions of
a rental agreement.
(B) If a landlord acts in violation of division (A) of this section the tenant
may:
(1) Use the retaliatory action of the landlord as a defense to an action by
the landlord to recover possession of the premises;
(2) Recover possession of the premises; or
(3) Terminate the rental agreement.
In addition, the tenant may recover from the landlord any actual damages
together with reasonable attorneys fees.
(C) Nothing in division (A) of this section shall prohibit a landlord from
increasing the rent to reflect the cost of improvements installed by the
landlord in or about the premises or to reflect an increase in other costs of
operation of the premises.
(Emphasis added.) R.C. 5321.02.
{¶27} Continental posits that the Franklins’ claim of retaliation must fail because,
“nowhere in the body of any of the pleadings do Defendants allege that Plaintiff increased
their rent, decreased services or brought or threatened to bring an action of possession.”
As a result, Continental concludes that the retaliation claim fails, “due to its defective
adherence to the literal terms of the statute.”
{¶28} Continental also offers that the testimony at trial does not support an
increase in rent, decrease in services, or bringing or threatening to bring an action for
possession as required by R.C. 5321.02. To that end, we preface our analysis by
clarifying that we presume regularity in the proceedings where, as in this case, the
transcript of proceedings has not been filed on appeal. N. Olmsted v. Rock, 8th Dist.
Cuyahoga No. 99333, 2013-Ohio-3152, ¶ 21.
{¶29} Continental cites no legal authority in support of their R.C. 5321.02
argument as required by App.R. 16(A)(7). We, therefore, are not required to address this
assignment of error. 1 See Thornhill v. Thornhill, 8th Dist. Cuyahoga No. 92913,
2009-Ohio-5569, ¶ 11, citing App.R. 16(A)(7) (declining to address an assignment of
error where party fails to support argument with citation to legal authority).
{¶30} In the interest of justice, we state that the scope of retaliatory acts
encompassed by R.C. 5321.02 is not afforded the strict and narrow construction proposed
by Continental. “The 1974 Landlords and Tenants Act was designed to balance the
rights between landlords and tenants, not to give one party an unfair advantage over the
other. See Smith v. Wright, 65 Ohio App.2d 101, 110, [416 N.E.2d 655 (8th
Dist.1979)].” Rice v. Reid, 3d Dist. Crawford No. 3-91-34, 1992 Ohio App. LEXIS
2145, at *8 (Apr. 23, 1992). “[T]he outcome of each case dealing with the Act will
depend upon the individual facts presented therein.” Smith at 110.
{¶31} The question of retaliation has arisen in cases such as a landlord’s refusal
to renew a lease agreement. See, e.g., Indian Hills Senior Community v. Sanders, 8th
Dist. Cuyahoga No. 78780, 2001 Ohio App. LEXIS 3717, at *7 (Aug. 23, 2001), and
K&D Mgmt., L.L.C. v. Masten, 8th Dist. Cuyahoga No. 98894, 2013-Ohio-2905. In
assessing a retaliation claim, the trial court is charged with determining the motives and
The four cases cited by Continental are offered to support their argument
1
that the only other termination mechanism available to the Franklins was for
breach of the warranty of habitability and R.C. 5321.07, information that is
informative but is not determinative of the question posed on appeal.
the reasons for the landlord’s actions and “temporal proximity is a substantial factor in
determining such motives.” (Citations omitted.) Reid v. Plainsboro Partners, III, 10th
Dist. Franklin Nos. 09AP-442 and 09AP-456, 2010-Ohio-4373, ¶ 39.
{¶32} Based on our review of the record, we disagree with Continental’s
assertion that the facts fail to support the trial court’s finding that the Franklins
established retaliation pursuant to R.C. 5321.02. The Franklins’ retaliation claim states
that the activities complained of “collectively” constitute a violation of R.C. 5321.02.
The allegations include the failure to exercise reasonable care in performing the washer
dryer installation, unreasonable demands for access to the unit without notice for
indefinite periods and at inconvenient times, failure to correct unsafe conditions,
deprivation of use of a portion of the Unit, and frivolously filing the lawsuit in December
2013.
{¶33} Further to the R.C. 5321.02 elements of a change in rent or services, the
Franklins were deprived of the full use of their guest room, and the removal of a closet,
from late October 2013 forward and, as the trial court stated, the installation was
incomplete by the end of December 2013. In implementing its washer/dryer installation
project in October 2013 Continental served notice on the Franklins of the various times
that it wanted access to the unit, sometimes for consecutive days at a time between the
hours of 8:00 a.m. and 5:00 p.m. The Franklins sometimes resisted the notifications
because they were, for example, out of town and did not receive the notice until the
morning entry was planned, or they expected guests during the holiday who would occupy
the guest room where the work was being conducted.
{¶34} After the Franklins lodged a report with the City, the tone of the emails
became increasingly contentious and Pearlman’s attitude toward effecting a mutual
accommodation for access to the Unit became more negative. As the trial court noted,
Pearlman even threatened to call the police if there was an access issue, even though the
email evidence reflects requests for arguably reasonable accommodation, for example,
requesting that the work begin on a Monday as a religious accommodation.
{¶35} The December rent situation was unique in the history of the lease
duration. Pearlman first sent an email addressed to the Franklins and several tenants
claiming failure to pay rent. In spite of the Franklins insistence that an envelope
containing the December rent and a note was properly deposited into the office mail slot
as required by the lease on November 30, 2012, Pearlman:
(1) declared he had not received the check and note and suggested the
Franklins issue a new check and include a late fee;
(2) “discovered” the envelope under a shelf on December 6, 2013, alleging
that it was under the shelf because the Franklins deposited it into the
payment slot with force;
(3) indicated he was going to deposit the original check even though he had
been informed that a stop payment had been issued per his suggestion;
(4) refused to meet with the Franklins to accept the replacement check and
issue a receipt;
(5) penalized the Franklins with a late fee and a returned check fee for a
situation that the facts demonstrate Pearlman created; and
(6) filed suit December 16, 2013 for the December rent plus a late fee and
returned check fee, as well as the January 2014 rent which was not yet due.
{¶36} We reiterate that, in examining a landlord’s reasons and motives in
determining retaliation, “temporal proximity is a substantial factor in determining such
motives.” (Citation omitted.) Reid at ¶ 39. The chronology of events supports the
presence of the proximity factor in this case.
{¶37} This court finds that the ongoing, repetitive requests for access to the Unit
and the extended period of time taken to complete the construction, interfering with the
Franklins’ use of the Unit; Pearlman’s obstreperous tone and threats to call the police to
obtain access; the effective increase of rent for December 2013 to include unwarranted
fees for late payment of rent and a returned check where the late receipt was caused by
Pearlman’s actions or inactions, culminating in filing the complaint for December rent
and January 2014 rent that was not yet due and that occurred after actual receipt of the
intent to rent deposit, constituted a violation of R.C. 5321.02.
{¶38} Appellant’s assignment of error is without merit. The trial court’s
decision is affirmed.
It is ordered that appellees recover from appellant costs herein taxed. The
court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the municipal
court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
__________________________________________
ANITA LASTER MAYS, JUDGE
KATHLEEN ANN KEOUGH, P.J., and
EILEEN T. GALLAGHER, J., CONCUR