Arnett v. Bardonaro

[Cite as Arnett v. Bardonaro, 2013-Ohio-1065.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
JAMES R. ARNETT, Trustee, et al. :
: Appellate Case No. 25371
Plaintiff-Appellee/Cross-Appellant :
: Trial Court Case No. 08-CV-1223
v. :
: (Civil Appeal from
FRANK BARDONARO, JR. : (Common Pleas Court)
:
Defendant-Appellant/Cross-Appellee:
:
...........
OPINION
Rendered on the 22nd day of March, 2013.
...........
LOWELL T. WOODS, JR., Atty. Reg. #0068768, and VALERIE M. MUNAFO, Atty. Reg.
#0088769), Taft Stettinius & Hollister LLP, 40 North Main Street, Suite 1700, Dayton, Ohio
45423
Attorney for Plaintiff-Appellee/Cross-Appellant, James R. Arnett, Jr.
GLEN E. HAZEN, JR., Atty. Reg. #0036885, Law Office of Glen E. Hazen, Jr., 810
Sycamore Street, Fourth Floor, Cincinnati, Ohio 45202
Attorney for Defendant-Appellant/Cross-Appellee, Frank Bardonaro, Jr.
.............
FAIN, P.J.
{¶ 1} Defendant-appellant Frank Bardonaro, Jr. appeals from a judgment for
2
plaintiff-appellee James R. Arnett, Jr., as Trustee of the James R. Arnett Trust. Bardonaro
contends that the trial court erred in awarding judgment on Arnett’s claim for money damages
resulting from Bardonaro’s breach of a land contract involving the sale of a condominium and
in overruling Bardonaro’s motion for summary judgment on that claim. Bardonaro further
contends that the trial court erred in finding that Arnett was not required to mitigate his
damages and sell the condominium, once Bardonaro breached the contract. Bardonaro also
argues that the trial court erred in awarding attorney fees in the amount of $101,232.88 when
Arnett prevailed on only one of the three issues he pursued at trial. In a cross-appeal, Arnett
contends that the trial court erred in finding that he had waived his contractual right to have
Bardonaro pay the property taxes and condominium fees.
{¶ 2} We conclude that the trial court did not err in awarding judgment to Arnett on
his breach of contract claim, or in overruling Bardonaro’s motion for summary judgment.
Furthermore, we conclude that Arnett was permitted to elect his remedy under the contract,
and was not required to mitigate his damages by selling the condominium. We also conclude
that the trial court did not abuse its discretion in its award of attorney fees to Arnett. Finally,
we conclude that the trial court did not err in holding that Arnett waived his right to collect
property taxes and condominium fees from the date of closing until he demanded that
Bardonaro make those payments. However, we conclude that the trial court erred by not
awarding Arnett taxes and fees that were incurred after he demanded that Bardonaro make
those payments. Accordingly, that part of the judgment of the trial court denying Arnett’s
claim against Bardonaro for post-demand taxes and fees is Reversed, the judgment is
Affirmed in all other respects, and this cause is Remanded for the trial court to re-calculate
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damages.
I. Arnett and Bardonaro Enter Into a Land Contract
{¶ 3} James Arnett, Jr., and Frank Bardonaro, Jr., met and became friends in the
1990's. Around January 2001, Arnett loaned some money to Bardonaro, which was
evidenced by checks written by Arnett and a promissory note. Bardonaro was required to
make monthly payments to pay off the promissory note.
{¶ 4} Arnett, as Trustee of the James R. Arnett Trust, owned a condominium unit
located at 1174 Nutmeg Court in Centerville. He began renting the condominium to
Bardonaro in January 2002. On December 28, 2002, Arnett agreed to sell the condominium
to Bardonaro pursuant to a Land Contract. The purchase price for the condominium was
$125,000, plus 9% annual interest, the total of which was to be paid in 147 consecutive
monthly installments of $1,935.49, plus one final payment of $2,826.06. The Land Contract
provided that Bardonaro would be responsible for the payment of real property taxes,
insurance, and condominium fees, beginning on January 1, 2003, the closing date. The
monthly payments under the Land Contract were scheduled to begin later, on July 15, 2006.
{¶ 5} Under the terms of the Land Contract, failure to pay amounts due, or failure to
comply with any term or condition of the contract not involving the payment of money,
constituted an event of default. If an event of default occurred, the Land Contract permitted
Arnett to choose between a number of alternative remedies, including the option to “declare
all amounts remaining unpaid [under the Land Contract] immediately due and payable and
bring suit against [Bardonaro].”
[Cite as Arnett v. Bardonaro, 2013-Ohio-1065.]
{¶ 6} After the closing date passed, Bardonaro failed to pay the real property taxes
and condominium fees. Arnett continued to pay the taxes and fees. Arnett claimed the
payment of these taxes and fees as deductions on his annual tax returns.
{¶ 7} In July 2006, Arnett began making the monthly installment payments under
the Land Contract. In March 2007, Arnett contacted Bardonaro to inform him that Bardonaro
was obligated to reimburse Arnett for the property taxes and condominium fees that Arnett
had been paying since the closing date. Bardonaro refused to reimburse Arnett for these
payments, and a dispute arose over how much money Bardonaro owed Arnett.
II. Course of the Proceedings
{¶ 8} On February 4, 2008, Arnett, as Trustee of the James R. Arnett Trust, filed a
complaint for money damages against Bardonaro, alleging breach of the Land Contract.
Bardonaro did not make any monthly payments under the Land Contract after the complaint
was filed.
{¶ 9} In April 2008, Arnett filed an amended complaint, repeating the breach of
contract claim and adding an unjust enrichment claim, which was based on Arnett’s payment
of property taxes, insurance premiums, and condominium fees. At the end of April,
Bardonaro sent an e-mail to Arnett alerting him that Bardonaro was giving the keys to the
condominium to Bardonaro’s attorney to be returned to Arnett.
{¶ 10} Bardonaro filed a motion for summary judgment on both counts of Arnett’s
complaint. The magistrate found that there were genuine issues of material fact relating to
Arnett’s claims. Bardonaro did not file any objections to the magistrate’s decision
concerning summary judgment. The trial court overruled Bardonaro’s motion for summary
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judgment.
{¶ 11} A trial before the magistrate was conducted in February 2010. Following the
trial and the filing of post-trial briefs by the parties, the magistrate issued a decision,
concluding, in part: (1) that the Land Contract provided for Bardonaro’s payment of real estate
taxes and condominium fees, but that the doctrine of waiver barred collection of those
amounts, (2) that Arnett substantially performed under the Land Contract, (3) that Bardonaro
defaulted under the Land Contract by failing to make monthly installment payments since
March 2008, and repudiated the Land Contract by returning his keys to the condominium in
April 2008, (4) that Bardonaro is not entitled to a reduction in damages based on Arnett’s
failure to mitigate damages, and (5) that the Land Contract is cancelled as of the date of
judgment, pursuant to R.C. 5313.09. The magistrate awarded Arnett damages in the amount
of $192,653.01. Both parties filed objections to the magistrate’s decision.
{¶ 12} The trial court found that the magistrate improperly cancelled the Land
Contract, and that the magistrate’s finding regarding repudiation was unnecessary. The trial
court overruled Bardonaro’s objections to the magistrate’s decision and granted, in part, and
overruled, in part, Arnett’s objections. The trial court found that Bardonaro had breached the
Land Contract by failing to make the required monthly payments, and that Arnett was not
required to mitigate his damages and sell the condominium after Bardonaro’s breach.
Regarding the property taxes and condominium fees, the trial court found that Arnett waived
his right to collect the taxes and fees when he continued to pay them after the closing date.
The trial court concluded “that issues remain for the Magistrate to decide concerning an award
of litigation expenses and attorney fees and damages caused by [Bardonaro’s] abandonment of
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the property.”
{¶ 13} The magistrate held a hearing on attorney fees. Two attorneys who
represented Arnett during the dispute with Bardonaro testified. Arnett introduced the billing
invoices into evidence. The magistrate found that although Arnett prevailed on only one of
three issues at trial, the issues involved a common core of facts, and it was impractical to
separate out how much of Arnett’s attorney fees involved the winning issue (breach of
contract) versus the losing issues (condominium fees and property taxes). Nevertheless, the
magistrate did not award the full amount of attorney fees requested by Arnett, because the
magistrate found that there were not any novel or exceptionally difficult questions of law or
fact involved in the suit, and that the results obtained, as compared with the total amount
billed in legal services, militated against the reasonableness of the amount of attorney’s fees
requested. The magistrate concluded that $55,000 for attorney fees and costs was “reasonable
and appropriate under the circumstances.” Both parties objected to the magistrate’s decision
awarding attorney fees.
{¶ 14} The trial court overruled Bardonaro’s objections and sustained Arnett’s
objections. The trial court rejected the magistrate’s decision to reduce Arnett’s attorney fees.
According to the trial court, “the case may have seemed simple in hindsight but the case
evolved into being a more intricate and more complex matter than at first glance.” The trial
court also found that the attorney fees “should not be adjusted downward solely based on the
proportion of the attorney fees sought compared to the amount received.” Based on a review
of the testimony and evidence submitted, the trial court awarded attorney fees in the amount of
$101,232.88. Both parties appealed.
[Cite as Arnett v. Bardonaro, 2013-Ohio-1065.]
III. The Evidence in the Record Supports the Trial Court’s Judgment
in Favor of Arnett on his Breach of Contract Claim
{¶ 15} Bardonaro’s First Assignment of Error states:
THE TRIAL COURT ERRED TO THE PREJUDICE OF
APPELLANT/CROSS-APPELLEE IN GRANTING JUDGMENT IN FAVOR
OF APPELLEE/CROSS-APPELLANT ON HIS BREACH OF CONTRACT
CLAIM.
{¶ 16} Bardonaro contends that the trial court erred in granting judgment to Arnett on
his breach of contract claim based upon Bardonaro’s failure to pay his monthly obligations
under the Land Contract. According to Bardonaro, Arnett did not include in his breach of
contract claim any allegation that Bardonaro failed to make the monthly payments under the
Land Contract. To the contrary, according to Bardonaro, Arnett based his breach of contract
claim solely on Bardonaro’s failure to pay property taxes and condominium fees.
Furthermore, Bardonaro contends that Arnett accelerated the payments due under the Land
Contract based solely on Bardonaro’s failure to pay property taxes and condominium fees, not
upon his failure to make the monthly installment payments of the purchase price. Because
the trial court found that Arnett had waived his right to collect the property taxes and
condominium fees, Bardonaro contends that there remained no basis on which the trial court
could enter judgment for Arnett on his breach of contract claim. We do not agree.
{¶ 17} The trial court found, in pertinent part:
The Land Contract unambiguously provides that default occurs when
“Buyer fails to pay any amount due hereunder and such failure continues for a
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period of five (5) days.” In addition, the parties agreed to an enforceable
acceleration clause, which permits the Seller upon default, and at his option, to
“(i) declare all amounts remaining unpaid hereunder immediately due and
payable and bring suit against Buyer for any and all liabilities, losses, costs,
expenses, injuries and damages incurred by Seller as a result of such default,
including without limitation, reasonable attorney’s fees and litigation expenses
. . .” Defendant defaulted by not making payments after February 2008, and
Plaintiff exercised the option to accelerate the debt by bringing suit against
Defendant for the entire amount owing under the Land Contract.[] Amended
Complaint. Once Defendant defaulted and Plaintiff invoked the acceleration
clause, the Land Contract became indivisible. The obligations to pay each
installment merged into one obligation to pay the entire balance on the Land
Contract. * * * There was already a total breach once Defendant defaulted and
Plaintiff elected to accelerate the debt.
{¶ 18} In his amended complaint, Arnett alleged that “Bardonaro made monthly
payments on the Land Contract, although certain monthly payments were not made in full.”
Amended Complaint, ¶ 11. Arnett also alleged that “Bardonaro failed to make payments in
accordance with the express terms of the Land Contract, and has failed to timely remedy that
default after notification of the same.” Id. at ¶ 13. Furthermore, it is undisputed that
Bardonaro failed to make any of the required monthly payments after February 2008. The
allegations in the amended complaint put Bardonaro on notice that the failure to make
monthly payments was part of the basis for Arnett’s breach of contract claim. Indeed, the
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parties showed in their numerous filings with the trial court, and in their presentation of
evidence at the trial, that they both considered Bardonaro’s failure to make monthly
installment payments under the Land Contract to be part of Arnett’s breach of contract claim.
{¶ 19} Bardonaro contends that his failure to make monthly payments after February
2008 cannot form the basis of Arnett’s breach of contract claim. According to Bardonaro,
“[o]nce Arnett alleged a breach of the Land Contract and invoked the acceleration clause, the
land contract became indivisible. The obligations of Bardonaro to make future installment
payments and payments for property taxes merged into one obligation to pay the entire balance
on the land contract.” Brief, p. 8. In support of his position, Bardonaro cites U.S. Bank Natl.
Assn. v. Gullotta, 120 Ohio St.3d 399, 2008-Ohio-6268, 899 N.E.2d 937.
{¶ 20} Bardonaro’s reliance on Gullotta is misplaced. In Gullotta, the Supreme
Court was faced with a certified question involving a unique set of facts and a narrow legal
issue. Specifically, Gullotta involved a bank’s third attempt through a foreclosure action to
accelerate payments under a promissory note, based on the homeowner’s default. The first
two lawsuits based on the homeowner’s default had been voluntarily dismissed under Civ.R.
41(A). The Court was faced with the narrow question whether the two prior voluntary
dismissals barred the third suit under the doctrine of res judicata. The Court began its
analysis by making it very clear that:
[t]he question certified to us defies an answer that can apply to all cases.
* * * This case is this case. The significant facts here are that the underlying
note and mortgage never changed, that upon the initial default, the bank
accelerated the payments owed and demanded the same principal payment that
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it demanded in every complaint, that Gullotta never made another payment
after the initial default, and that U.S. Bank never reinstated the loan. Id. at ¶
18-19.
{¶ 21} The Court then addressed whether each failure to make a monthly payment
created a separate claim on which the bank could commence a third lawsuit against the party
who defaulted. The Court answered that question in the negative, holding:
By agreeing to an acceleration clause, the parties in this case have
avoided the operation of the general rule that nonpayment on an installment
loan does not constitute a breach of the entire contract. In a contract with an
acceleration clause, a breach constitutes a breach of the entire contract. Once
Gullotta defaulted and U.S. Bank invoked the acceleration clause of the note,
the contract became indivisible. The obligations to pay each installment
merged into one obligation to pay the entire balance on the note. Id. at ¶ 31.
{¶ 22} Bardonaro argues that once Arnett filed a complaint in February 2008 and
demanded acceleration of the entire contract, Bardonaro was no longer required to make
monthly payments under the Land Contract because, per Gullotta, “[t]he obligations to pay
each installment merged into one obligation to pay the entire balance on the note.”
Furthermore, since Bardonaro was not in default at the time of the filing of the complaint in
February 2008, there was no basis on which the trial court could find that Bardonaro breached
the Land Contract by failing to make monthly installment payments.
{¶ 23} We are not persuaded by this argument. Gullotta found the contract
indivisible only after the debtor defaulted and the creditor invoked the acceleration clause.
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But Bardonaro argues that he had not defaulted at the time that Arnett filed the lawsuit against
him. Therefore, even under a broad reading of Gullotta, the contract was not yet indivisible
at the time that the complaint was filed. However, when Arnett filed his amended complaint
in April 2008, Bardonaro was in default under the Land Contract for failing to make monthly
payments, and Arnett had invoked the acceleration clause. Therefore, the trial court could
find that Bardonaro had breached the Land Contract, which entitled Arnett to invoke the
acceleration clause.
{¶ 24} Furthermore, we are inclined to read the holding in Gullotta more narrowly.
The issue in that case was whether a second Civ.R. 41(A) dismissal, because it was with
prejudice to the Bank’s claim, operated as a bar, under the doctrine of res judicata, to a
subsequent complaint based upon that claim. The Supreme Court held that it did. Here,
Arnett’s original complaint had not been adjudicated on the merits, by virtue of a second
Civ.R. 41(A) dismissal, or otherwise, when he filed his amended complaint. Thus, the issue
in this case is not whether a resolution of the claims set forth in the plaintiff’s original
complaint operated as a bar to the claims set forth in his subsequent (amended) complaint,
unlike in Gullotta, where that was the issue.
{¶ 25} The record contains competent, credible evidence supporting the trial court’s
judgment in favor of Arnett on his breach of contract claim based on Bardonaro’s failure to
make the required monthly payments under the Land Contract. Consequently, Bardonaro’s
First Assignment of Error is overruled.
IV. The Trial Court’s Denial of Bardonaro’s Motion For Summary Judgment
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Is Rendered Moot or Harmless By the Judgment in Favor of Arnett
{¶ 26} Bardonaro’s Second Assignment of Error states:
THE TRIAL COURT ERRED TO THE PREJUDICE OF
APPELLANT/CROSS-APPELLEE IN OVERRULING HIS MOTION FOR
SUMMARY JUDGMENT ALLEGING THAT
APPELLEE/CROSS-APPELLANT BREACHED THE LAND CONTRACT
BY NOT PROVIDING MONTHLY STATEMENTS AS REQUIRED UNDER
THE LAND CONTRACT.
{¶ 27} Paragraph 17 of the Land Contract provides as follows: “STATEMENTS: At
least once a year, or on demand of Buyer, but no more than twice a year, Seller shall furnish a
statement to Buyer showing (a) the amount credited to principal and interest under this Land
Contract and (b) the balance due.” It is undisputed that Arnett did not send these annual
statements to Bardonaro.
{¶ 28} In his motion for summary judgment, Bardonaro contended that Arnett could
not establish the second element of a breach of contract claim: that the claimant had fulfilled
his contractual obligations. The magistrate rejected Bardonaro’s argument, finding that:
“[Arnett] claims that [Bardonaro] was given an amortization table at the beginning of the
contact [sic] and several times thereafter, showing the required information. Accordingly,
there is a genuine issue of material fact as to whether the documentation provided was
sufficient to satisfy [Arnett’s] contractual obligations.” The trial court subsequently adopted
the reasoning of the magistrate, and overruled Bardonaro’s motion for summary judgment.
{¶ 29} The trial court properly denied Bardonaro’s motion for summary judgment.
13
At that time, there remained genuine issues of material fact regarding whether the
documentation provided by Arnett was sufficient to satisfy his contractual obligations and
whether the failure to provide the annual statements was a material breach that would excuse
Bardonaro’s performance.
{¶ 30} Furthermore, following a trial, the trial court held that R.C. 5314.04 provides
the proper remedy for a buyer who does not receive the required annual statements, and
Bardonaro failed to take advantage of this remedy. Generally, “the denial of a motion for
summary judgment is not a point of consideration in an appeal from a final judgment entered
following a trial on the merits. Continental Ins. Co. v. Whittington, 71 Ohio St. 3d 150, 156,
642 N.E. 2d 615 (1994). If a trial court denies a motion for summary judgment due to the
existence of genuine issues of material fact, and a subsequent trial results in a verdict for the
party who did not move for summary judgment, then any error in denying the motion for
summary judgment is rendered moot or harmless. Id. at syllabus.
{¶ 31} In the case before us, the trial court found that there were genuine issues of
material fact requiring a trial. After hearing the testimony from both parties, the trial
rendered a verdict in favor of Arnett, the party who had not moved for summary judgment.
Therefore, the trial court's ruling on Bardonaro’s motion for summary judgment was rendered
moot or harmless by the subsequent judgment.
{¶ 32} Bardonaro’s Second Assignment of Error is overruled.
V. The Land Contract Provided for a Selection of Remedies, and Arnett
Was Not Required to Sell the Property to Mitigate his Damages
14
{¶ 33} Bardonaro’s Third Assignment of Error states:
THE TRIAL COURT ERRED TO THE PREJUDICE OF
APPELLANT/CROSS-APPELLEE BY RULING THAT THE
APPELLEE/CROSS-APPELLANT COULD ACCELERATE WITHOUT
MITIGATING DAMAGES.
{¶ 34} Paragraph 15 of the Land Contract provides, in part:
DEFAULT: The following shall constitute an event of default under this Land
Contract:
a. Buyer fails to pay any amount due hereunder and such
failure continues for a period of five (5) days.
b. Buyer fails to comply with any term or condition of this
Land Contract other than those regarding the payment of money.
***
Upon the occurrence of an event of default, Seller may, at his option, do
any of the following: (i) declare all amounts remaining unpaid hereunder
immediately due and payable and bring suit against Buyer for any and all
liabilities, losses, costs, expenses, injuries and damages incurred by Seller as a
result of such default, including without limitation, reasonable attorneys’ fees
and litigation expenses; (ii) if applicable, seek a forfeiture of this Land Contract
in accordance with applicable laws; (iii) foreclose on this Land Contract; or (iv)
exercise any other rights and remedies available at law or in equity. * * *
Seller’s remedies, whether arising under this Land Contract or otherwise
15
available at law or in equity, are cumulative, and Seller’s exercise of any
remedy shall not be deemed to limit or supersede any remedy otherwise
available.
{¶ 35} The trial court held that Arnett properly elected his remedy under the Land
Contract. The court found, in pertinent part:
Defendant did not repudiate or cancel the contract in April 2008 when
he sent his keys to Plaintiff’s counsel, and, as a result, Defendant continues to
hold equitable title. * * * Defendant argues that R.C. 5313.07, R.C. 5313.09,
and accompanying case law permit buyers under a land installment contract to
cancel or terminate a land contract. R.C. 5313.07 provides, “[c]hapter 5313 of
the Revised Code does not prevent the vendor and vendee from canceling their
interest in a land installment contract under 5303.331 of the Revised Code.”
(Emphasis added.) Therefore, if a vendor and vendee agree to cancel their
interest in a land installment contract they can do so by following the
procedures provided in R.C. 5303.331. This did not occur in this case. Under
both the Land Contract and R.C. 5313, only Plaintiff, as vendor, had
foreclosure and forfeiture as possible remedies, and he lawfully chose not to
pursue either of them. It would be erroneous for this Court to require Plaintiff
to pursue a remedy that he did not elect through the mitigation doctrine.
Defendant argues that if a party invokes an acceleration clause that
party must mitigate his damages and cites French Town Square Partnership v.
Lemstone, Inc., 99 Ohio St.3d 254, 257, 2003-Ohio-3648, 791 N.E.2d 417 in
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support. French Town Square does not support Defendant’s argument. In
French Town Square, the Ohio Supreme Court held that “[t]he duty to mitigate
arises in all commercial leases of real property, just as it exists in all other
contracts.” 2003-Ohio-3648, at ¶ 18. The Court stated that under common
law, leases were viewed as transfers of property interests, and, as such, a duty
to mitigate did not exist. Id. at ¶ 10-11. “Conversely, under the common law
of contracts, mitigation of damages is a fundamental tenet of a damage
calculus.” Id. at ¶ 12. The Court noted that the “modern trend” is to treat
leases less like conveyances of real property, thereby making ordinary contract
principles applicable. Id. at ¶ 13. Notably, this case involves acceleration of
a debt under a land installment contract, not a lease agreement. Defendant’s
statement of the law is incorrect. Common sense dictates that a vendor who
elects to accelerate the balance due under a land installment contract does not
have a duty to mitigate.
{¶ 36} Bardonaro contends that the trial court erred by finding that Arnett could
accelerate the monthly payments under the Land Contract without also mitigating Arnett’s
damages. According to Bardonaro, once Arnett exercised his right to accelerate the payments
under the Land Contract, Arnett had a corresponding duty to mitigate his damages by selling
the condominium. We do not agree.
{¶ 37} The Land Contract provided a choice of remedies that Arnett could pursue
when Bardonaro breached his duties under the Land Contract. Arnett was not obligated, as
Bardonaro contends, to sell the condominium after Bardonaro stopped making payments
17
under the Land Contract. Arnett could, and did, choose to exercise the option of accelerating
the payments under the Land Contract and bringing a suit against Bardonaro to compel the
performance of the contract. In other words, he could elect to receive the purchase price in
exchange for the property, which was the benefit of the bargain he negotiated with Bardonaro.
Arnett properly elected his remedy pursuant to the Land Contract.
{¶ 38} Bardonaro cites the decision of the Supreme Court of Ohio in French Town
Square, supra (cited in the trial court’s decision quoted above), in support of his proposition
that Arnett was obligated to mitigate his damages and sell the condominium after Bardonaro’s
breach of the Land Contract. In French Town Square, however, the Supreme Court noted
that the modern trend was to treat leases less like conveyances of real property, which would
make ordinary contract principles like the doctrine of mitigation of damages applicable to
leases. But the Land Contract before us is a transfer in real property, not a lease.
Consequently, Arnett was permitted to elect his remedy under the Land Contract, and was not
required to mitigate his damages through a sale of the condominium.
{¶ 39} Bardonaro’s Third Assignment of Error is overruled.
VI. Arnett Waived His Right to Have Bardonaro Pay Any Property
Taxes And Condominium Fees From The Date of Closing Until
Arnett Demanded Payment From Bardonaro In March 2007
{¶ 40} Arnett’s assignment of error in his cross-appeal states:
THE TRIAL COURT ERRED WHEN IT CONCLUDED THAT
ARNETT WAIVED HIS RIGHT TO COLLECT PROPERTY TAXES AND
18
CONDOMINIUM FEES FROM BARDONARO.
{¶ 41} The Land Contract provided that Bardonaro was obligated to pay the property
taxes and condominium fees after the closing date, January 1, 2003. Arnett contends that the
trial court erred in concluding that he waived his right to collect these property taxes and
condominium fees. According to Arnett, his failure to collect the taxes and fees was akin to
an administrative oversight, and did not constitute an intentional relinquishing of his right.
{¶ 42} Waiver is a voluntary relinquishment of a known right and is generally
applicable to all personal rights and privileges, whether contractual, statutory, or
constitutional. Glidden Co. v. Lumbermans Mut. Casualty Co., 112 Ohio St.3d 470,
2006-Ohio-6553, 861 N.E.2d 109, ¶ 49 (Citations omitted.) The trial court found that Arnett
waived his contractual right to have Bardonaro pay the condominium fees and property taxes.
The court found, in part:
The greater weight of the evidence establishes that Plaintiff waived his
right to receive real property taxes and condominium fees from Defendant.
The Magistrate correctly concluded that Plaintiff waived his right to receive
condominium fees from Defendant. Plaintiff knew that Defendant was
contractually obligated to pay the condominium fees. The Land Contract
became effective as of January 1, 2003, however, Plaintiff continued to pay the
monthly condominium fees and had the fees automatically deducted from his
checking account. Plaintiff waited until February 2007 to ask Defendant for
the condominium fees that Plaintiff paid. Plaintiff acted inconsistently with
his right to collect condominium fees from Defendant.
19
The Court further finds that the Magistrate correctly concluded that
Plaintiff waived his right to receive real property taxes. Pursuant to the Land
Contract, Defendant was required to pay the taxes after the closing date on
January 1, 2003. Plaintiff signed the Land Contract and, as such, cannot argue
that he was not aware of its terms. Plaintiff paid the property taxes for over
three years before requesting payment from Defendant in February 2007.
{¶ 43} It is undisputed that Arnett continued to pay the fees and property taxes after
the closing date, January 1, 2003. Furthermore, Arnett reported these payments on his annual
tax returns and received tax benefits as a result. Based on this evidence, we conclude that the
trial court did not err in holding that Arnett had waived his right to collect payments he made
for fees and taxes incurred after the date of closing, up to March 2007.
{¶ 44} Arnett also contends that even if he had waived his right to collect past fees
and property taxes, he did not waive this right with respect to Bardonaro’s future obligation to
pay property taxes and condominium fees. In other words, once Arnett alerted Bardonaro in
March 2007 that Bardonaro was responsible for paying these fees and taxes, there was no
longer any action or inaction to support a waiver of Bardonaro’s future obligation to pay fees
and taxes. We agree with Arnett on this point. Once Arnett demanded payment from
Bardonaro for condominium fees and property taxes, in March 2007, Bardonaro was on notice
that Arnett intended to enforce his contractual right to have Bardonaro pay the fees and taxes
in the future. Although Arnett is not entitled to reimbursement for fees and taxes paid prior
to March 2007, he is entitled to reimbursement for the fees and taxes he paid after March
2007.
20
{¶ 45} Arnett’s sole assignment of error is overruled, in part, and sustained, in part.
VII. The Amount of Attorney’s Fees Awarded to Arnett
Is Not Against the Manifest Weight of the Evidence
{¶ 46} Bardonaro’s Fourth Assignment of Error states:
THE TRIAL COURT ERRED TO THE PREJUDICE OF
APPELLANT/CROSS-APPELLEE IN AWARDING
APPELLEE/CROSS-APPELLANT ATTORNEY’S FEES IN THE AMOUNT
OF $101,232.88.
{¶ 47} In this assignment of error, Bardonaro first contends that the trial court erred
in awarding attorney fees to Arnett, because the trial court should not have rendered judgment
for Arnett on his breach of contract claim. As discussed in Part III, above, in the disposition
of Bardonaro’s First Assignment of Error, the trial court properly awarded judgment in favor
of Arnett. Consequently, we reject this contention.
{¶ 48} Bardonaro next contends that even if the trial court correctly rendered
judgment for Arnett, Arnett failed to provide sufficient evidence to support an award of
attorney fees. According to Bardonaro, only a portion of the attorney fees incurred by Arnett
related to the successful breach of contract claim, and the trial court erred by awarding fees
relating to Arnett’s request for reimbursement of past property taxes and condominium fees,
issues on which Arnett did not prevail at trial.
{¶ 49} In Unick v. Pro-Cision, Inc., 7th Dist. Mahoning No. 09 MA 171,
2011-Ohio-1342, the Seventh District Court of Appeals explained the proper analysis when a
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party requests attorney fees. The Seventh District wrote, at ¶ 27-30:
Although a contractual provision may entitle a prevailing party to
attorney's fees, the prevailing party still has the burden of proving the
reasonableness of the fees. * * * A trial court's determination of reasonable
attorney's fees must generally begin with a calculation of the number of hours
reasonably expended on the case times an hourly fee. * * * This lodestar
figure has been determined to be [t]he most useful starting point for
determining the amount of a reasonable fee, because it provides an objective
basis on which to make an initial estimate of the value of a lawyer's services.
***
In order to establish this minimum baseline for the determination of
attorney fees, the party requesting the award bears the burden of providing
evidence of any hours worked that would be properly billed to the client. The
hours worked should be necessary to the action and should not include hours
that are excessive, redundant, or otherwise unnecessary. * * * The requesting
party should exercise billing judgment with respect to hours worked, * * *
and should maintain billing time records in a manner that will enable a
reviewing court to identify distinct claims. * * * Even in the event that an
attorney provides representation on a contingent-fee basis, the attorney must
keep an accurate record of time and resources expended in order to be able to
provide satisfactory proof of the reasonable value of the legal services
rendered. * * *
22
The requesting party also bears the burden of proving the attorney's
hourly rate, and of establishing that the hourly rate is reasonable. [T]he
burden is on the fee applicant to produce satisfactory evidence-in addition to
the attorney's own affidavits-that the requested rates are in line with those
prevailing in the community for similar services by lawyers of reasonably
comparable skill, experience and reputation. Blum v. Stenson (1984), 465 U.S.
886, 895896, 104 S.Ct. 1541, 79 L.Ed.2d 891, at fn. 11.
Once the requesting party has adequately proven an appropriate number
of hours worked and the attorney's reasonable hourly fee, the trial court may
modify the baseline calculation by considering the factors listed in former DR
2106(B), now found in Prof. Cond. R. 1.5, which include the time and labor
involved in maintaining the litigation; the novelty and difficulty of the
questions involved; the professional skill required to perform the necessary
legal services; the attorney's inability to accept other cases; the fee customarily
charged; the amount involved and the results obtained; any necessary time
limitations; the nature and length of the attorney/client relationship; the
experience, reputation, and ability of the attorney; and whether the fee is fixed
or contingent. All factors may not be applicable in all cases and the trial court
has the discretion to determine which factors to apply, and in what manner that
application will affect the initial calculation. * * *
{¶ 50} In addition to the above framework, a court faced with a fee request should
keep in mind that where “the claims can be separated into a claim for which fees are
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recoverable and a claim for which no fees are not recoverable, the trial court must award fees
only for the amount of time spent pursuing the claim for which fees may be awarded.”
Bittner v. Tri-County Toyota, Inc., 58 Ohio St.3d 143, 145, 569 N.E.2d 464 (1991), citing
Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). We review the
trial court’s aware of attorney fees for an abuse of discretion. Bittner.
{¶ 51} The Land Contract provides that in the event that Bardonaro defaulted under
the contract, Arnett could “declare all amounts remaining unpaid hereunder immediately due
and payable and bring suit against Buyer for any and all * * * damages incurred by Seller as a
result of such default, including without limitation, reasonable attorneys’ fees and litigation
expenses[.]” The trial court found that the Land Contract entitled Arnett to reasonable attorney
fees incurred in pursuit of his successful breach of contract claim.
{¶ 52} The trial court conducted the proper analysis, as described by the Seventh
District Court of Appeals in Unick. At the hearing on attorney fees, two of the attorneys who
represented Arnett in his dispute with Bardonaro testified regarding the amounts they billed
Arnett for legal services, and whether these amounts were reasonable. We have reviewed this
testimony and the invoices that were introduced into evidence at the attorney fee hearing.
The evidence in the record supports the trial court’s fee award. Furthermore, we agree with
the trial court that the claims in Arnett’s amended complaint involved a common core of facts,
making it difficult to separate “a claim for which fees are recoverable and a claim for which
no fees are recoverable.” Bittner. Also, based on our disposition of Arnett’s cross-appeal, as
set forth in Part VI, above, we are reversing the trial court’s judgment to the extent that it held
that Arnett had waived his right to property taxes and condominium fees incurred after March
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2007. Therefore, Arnett did in fact prevail on a portion of the two remaining issues
(condominium fees and property taxes) in his amended complaint. And, on the record before
us, the attorney fees are not capable of separation between the work done on the claim for
taxes and fees before March 2007, on which Arnett has not prevailed, and the work done on
the claim for taxes and fees after that date, on which Arnett has prevailed, as a result of this
appeal.
{¶ 53} Based on the evidence in the record, we conclude that the trial court did not
abuse its discretion in awarding attorney fees to Arnett in the amount of $101,232.88.
Consequently, Bardonaro’s Fourth Assignment of Error is overruled.
VIII. Conclusion
{¶ 54} Arnett’s sole assignment of error in his cross-appeal having been sustained, in
part, and all of Bardonaro’s assignments of error having been overruled, the judgment of the
trial court judgment is Reversed, in part, and this cause is Remanded for the re-calculation of
damages. The judgment of the trial court is Affirmed in all other respects.
.............
DONOVAN and WELBAUM, JJ., concur.
Copies mailed to:
Lowell T. Woods, Jr.
Valerie M. Munafo
Glen E. Hazen, Jr.
Hon. Michael Krumholtz