Langfan v. Carlton Gardens Co.

[Cite as Langfan v. Carlton Gardens Co., 183 Ohio App.3d 260, 2009-Ohio-3318.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
LOGAN COUNTY
LANGFAN et al.,
APPELLEES,
v. CASE NO. 8-09-06
CARLTON GARDENS COMPANY et al.,
APPELLEES;
OPINION
PATEL et al.,
APPELLANTS.
Appeal from Logan County Common Pleas Court
Trial Court No. CV 06 11 0565
Judgment Affirmed in Part, Reversed in Part and Cause Remanded
Date of Decision: July 6, 2009
APPEARANCES:
Terrence G. Stolley, for appellee Carlton Gardens Company.
William R. Montgomery, for appellants.
Darrell L. Heckman, for appellant Kiran Patel, a.k.a. Ken Patel.
Case No. 8-09-06
PRESTON, Presiding Judge.
{¶1} Defendants-appellants, Upendrakamar B. Patel, also known as Ben
Patel (“Ben”), and Kiran Patel, also known as Ken Patel (“Ken”), appeal the
judgment of the Logan County Court of Common Pleas, rendered appealable
pursuant to Civ.R. 54(B) by nunc pro tunc judgment on June 2, 2009, which found
in favor of plaintiffs-appellees, Harshad Patel, also known as Harry Patel
(“Harry”), Bharatibien Patel, and Jignaay, L.L.C. (collectively, “Jignaay”). For
the following reasons, we affirm in part and reverse in part.
{¶2} This matter stems from a foreclosure action brought by plaintiffs
Mark Langfan, Dayna Langfan, Robin Hamer, and William Langan, d.b.a. Abnet
Realty (collectively, “Abnet Realty”), as mortgagee, against defendant Carlton
Gardens Company (“Carlton Gardens”), as mortgagor, defendant Jignaay, as then
current tenant and sub-sublessee of the real property subject to the foreclosure,
defendant-appellant Ken Patel, as lessee, and defendant-appellant Ben Patel, as
sublessee. The mortgage covered property that contained both a motel business
and a restaurant business. The leases in question on this appeal concern only the
motel portion of the property.
{¶3} The motel property was originally leased by Carlton Gardens to Ken
on December 10, 1993 (“master lease”). The master lease was for a term of ten
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years, which commenced on December 11, 1993, and also contained an option to
extend the term of the lease for an additional ten years. This option was exercised
in December 2003, which extended the term of the master lease to December 10,
2013. Under the terms of this lease, Ken was to make rental payments directly to
Abnet Realty.
{¶4} On July 15, 1998, Ken subleased the motel property to Ben and
assigned all of his rights and obligations under the master lease, with the exception
of his obligation to pay the lease payments to the mortgagee. Subsequently, in
May 2005, Ben and Ken entered into a lease agreement with Jignaay that
expressly incorporated the terms of the master lease. Ken also assigned all of his
rights and obligations under the master lease to Jignaay, with the exception of his
obligation to make rental payments. In addition, Jignaay was to make rental
payments to Ben.
{¶5} In February 2002, the mortgage on the property became delinquent,
and a foreclosure complaint was filed on November 27, 2006, which was amended
on June 26, 2007, to include Jignaay, Ken, and Ben as defendants. Jignaay filed
cross-claims against Ken and Ben alleging various claims for relief, including
breach of contract. Ben filed a cross-claim against Ken based on breach of
contract and indemnification. The cross-claims were bifurcated from the
foreclosure action. The foreclosure action was tried, resolved in favor of Abnet
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Realty, and the real estate was sold back to Abnet Realty at a sheriff’s sale on June
25, 2008.
{¶6} The cross-claims were tried on December 30, 2008, and on January
13, 2009, the trial court found in favor of Jignaay against Ken and Ben based on
breach of contract, awarded damages in the amount of $78,220.00, plus interest
and costs, and found Ken and Ben jointly and severally liable for the amount of
damages.
{¶7} Ken and Ben now appeal, with Ben raising three assignments of
error and Ken raising one assignment of error for our review.
BEN’S ASSIGNMENT OF ERROR NO. I
The court erred in concluding that because the mortgage was in
default, therefore the lease was also in default and that such required
appellant under the lease to give notice of default to appellee.
BEN’S ASSIGNMENT OF ERROR NO. II
The court erred in failing to find that any damages suffered by
appellee resulted from appellee’s failure to continue making lease
payments under the terms of its lease and voluntarily abandoning the
premises.
BEN’S ASSIGNMENT OF ERROR NO. III
The court erred in failing to rule on the cross-claim of appellant Ben
Patel against appellee Ken Patel and in not finding in favor of the
appellant on said cross-claim.
KEN’S ASSIGNMENT OF ERROR NO. I
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The trial court erred in finding that appellant breached a contract
proximately causing damage to appellee.
{¶8} Overall, both parties claim that the trial court erred in finding that a
breach of contract occurred and thereby awarding Jignaay damages.
{¶9} Leases are considered contracts, and as such should be interpreted
with reference to contract principles. United States Corr. Corp. v. Ohio Dept. of
Indus. Relations (1995), 73 Ohio St.3d 210, 216, 652 N.E.2d 766; Stine v.
Northwest Ohio Realty Co. (Mar. 16, 1989), 3d Dist. No. 8-86-24, at *3. The
construction and interpretation of contracts are matters of law. Latina v.
Woodpath Dev. Co. (1991), 57 Ohio St.3d 212, 214, 567 N.E.2d 262. An
appellate court applies a de novo standard of review to questions of law and may
interpret the language of the contract, substituting its interpretation for that of the
trial court. Bryan Publishing Co. v. Kuser, 3d Dist. No. 7-07-17, 2008-Ohio-2610,
¶ 16, citing Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801 N.E.2d
452, ¶ 9.
Ben’s first assignment of error
{¶10} In Ben’s first assignment of error, he argues that the trial court erred
in concluding that because the mortgage was in default, the lease was also in
default, and as such, Ben and Ken were required to give Jignaay notice. While
Ben acknowledges that the trial court’s ruling is unclear, he claims that it appears
that the trial court found a breach of contract either because of a failure to give
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notice or because the mortgage had been in default. We disagree with Ben’s
interpretation of the trial court’s judgment entry.
{¶11} In its judgment entry, the trial court stated:
This cause of action centers around a motel at 308 North Main
Street, Bellefontaine, Ohio known as the Mountain Top Inn. A
restaurant was located on the same premise. In 1993 the fee holder
of the premise, Carlton Garden, entered into a ten-year lease with
one option to renew for ten years with Ken Patel. The lease
commenced on December 11, 1993. * * * According to paragraph
seventeen of said lease the lease survives any foreclosure of a
mortgage and the lessees would not be named as a party to any
foreclosure action. In 1998 Ken Patel subleased this premise to Ben
Patel * * *. Subsequently in 2005, commencing on May 7 of that
year, Ben Patel subleased the premise to Harry Patel dba Jignaay
LLC. The option of the additional ten years had been exercised in
December of 2003 so the master lease was extended to December
11, 2013.
The testimony of cross-claimant Harry Patel was that he paid Ben
Patel $135,000 to purchase the motel; that is to take over his interest
in the lease and operate it through the expiration of the same. That
would mean that Harry Patel doing business as Jignaay LLC had the
right to operate the motel from May 7, 2005 to December 11, 2013
or approximately one hundred three months. Under the terms of the
lease, paragraph seventeen provided for a notice of default from the
lessors to the lessee. After said notice, the sublease provided for a
ten-day cure period. The parties stipulated that the Jignaay
defendants were never provided any notice of default, verbal or
written of the sub sublease between Jignaay LLC and Defendants
Ken and Ben Patel. Therefore, the Court finds that the lease was in
full force and effect when the amended foreclosure was filed in June
26, 2007 naming the Jignaay defendants and Harry Patel as parties.
On March 27, 2008 a judgment entry/decree of foreclosure was
granted by this Court ordering the property sold. A final appealable
order endorsement was placed beneath the signature of the Court and
the Clerk appears to have provided notice of said final judgment to
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all parties not in default. The Court overruled Harry Patel’s [Civ.R.]
60B motion to set aside the judgment and the property was sold at
sheriff’s sale on June 25, 2008 and the entry of confirmation was
filed August 19, 2008.
The Court finds as a matter of contract that Harry Patel and the
Jignaay defendants did not get what they bargained for. They paid
$135,000 for the right to run the Mountain Top Inn for one hundred
three months paying rent in the amount of $3,100 per month. This
rent was paid regularly with the exception of December 2006 up
through April or May 2007 depending upon whether one follows the
stipulation or Harry’s testimony. Nevertheless, the default
procedure to cancel the lease was never activated and the lease
remains in effect.
What then are the damages suffered by the Jignaay defendants?
They paid for the right to rent the motel for one hundred three
months; in fact, they occupied the same from May 2005 through July
of 2008 or thirty-eight months. At the $135,000 price, they paid
$1,310.00 per month for one hundred three months for said right.
They received thirty-eight months or $49,780. That amount deduced
from the $135,000 leaves a damage of $85,220. In addition, the
Court finds that the $500 due under the terms to Ken Patel was not
paid for thirteen months equaling $6,500. Crediting that to the
amount that Ken and Ben owe jointly, the Court concludes that the
damages are $78,220.
{¶12} There is nothing in the trial court’s judgment entry that leads us to
conclude that it found a breach of contract because Ben and Ken failed to give
Jignaay notice of the defaulted mortgage or because of the fact that the mortgage
was in default. The trial court’s statements regarding notice of default only
determined that the terms of the master lease were still in effect because there had
not been any notice of default given to Jignaay, not that the failure to give Jignaay
notice of the defaulted mortgage had amounted to a breach. Rather, the trial court
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found that there was a breach of contract because “Harry Patel and the Jignaay
defendants did not get what they bargained for. They paid $135,000 for the right
to run the Mountain Top Inn for one hundred three months paying rent in the
amount of $3,100 per month,” but only received 38 months of its bargain.
Because we cannot conclude that the trial court found a breach of contract
occurred because of a failure to give notice of the defaulted mortgage or because
of the fact that the mortgage had been in default, we find Ben’s arguments under
his first assignment of error are meritless.
{¶13} Ben’s first assignment of error is therefore overruled.
Ben’s second assignment of error
{¶14} In his second assignment of error, Ben argues that the trial court
erred by failing to find Jignaay’s damages resulted from his failure to continue
paying his rent and by voluntarily abandoning the premises. Specifically, Ben
claims that under the terms of the master lease, Jignaay still had the right to
continue its business and stay on the property even in the event of a foreclosure.
Under the master lease, Ben argues that as long as Jignaay continued to pay its
rent, it could not have been evicted; however, because Jignaay voluntarily
abandoned the property, he waived any rights he may have had with respect to the
property and now is estopped from suing Ben and Ken for damages.
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{¶15} Jignaay responds by arguing that the trial court did not err. With
respect to Ben’s argument that Jignaay voluntarily abandoned the property or
waived its right to assert a breach of contract claim, Jignaay argues that it did
oppose the pending foreclosure action and did not vacate the premise until after
the issuance of a sheriff’s deed following the sale of the property. In support of its
position, Jignaay cites the following passage:
An action to sell the mortgaged property is called a “foreclosure”
because, through judicial process, it will foreclose or cut off the
rights in the property of all parties to the action. That includes the
mortgagor, the mortgagee, subsequent holders of title, junior
lienholders, and all other claimants whose claims or interests in the
property attached subsequent to the mortgage.
Hembree v. Mid-Am. Fed. S. & L. (1989), 64 Ohio App.3d 144, 152, 580 N.E.2d
1103.
{¶16} Essentially, Jignaay claims that there were two breaches of contract
in this case, which are both contained within the language of the sub-sublease and
its incorporation of the language of the master lease. First, with respect to the
master lease, Jignaay points to paragraph 17, which states, “nor shall [Jignaay] be
named as a party defendant to any foreclosure of the lien,” and argues that because
Jignaay was named as a party defendant, Ben and Ken breached its contract.
Second, Jignaay claims that it paid Ken and Ben a total of $135,000 for the right to
operate the motel business, which was separate and in addition to its obligation to
pay rent. Because Jignaay was named as a defendant in the foreclosure action, in
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violation of paragraph 17 of the master lease, Ken and Ben thereby interfered with
its right to operate the motel business from May 2005 through December 10, 2013.
{¶17} First of all, with respect to Jignaay’s argument that there was a
breach based on the violation of paragraph 17 in the master lease, we do not
believe that this was the basis for the trial court’s ruling. Even though the trial
court acknowledged the fact that paragraph 17 contained the language that the
lessee shall not be named as a party defendant in a foreclosure action, later in its
opinion it specifically found that there was a breach because “Harry Patel and the
Jignaay defendants did not get what they bargained for. They paid $135,000 for
the right to run the Mountain Top Inn for one hundred three months paying rent in
the amount of $3,100 per month.” It is clear that naming Jignaay as a party
defendant in the foreclosure action was not a basis for the trial court’s breach of
contract finding; rather, it was the fact that Jignaay allegedly lost its right to
operate the motel for the contracted time that was the basis for the trial court’s
finding of a breach.
{¶18} Even still, the fact that Jignaay was named as a party defendant in
the foreclosure action does not justify a finding that a breach of contract occurred.
As stated above, contract principles apply when construing and interpreting lease
provisions. JC & F Invests. v. Housholder, 3d Dist. No. 17-08-11, 2008-Ohio-
5313, ¶ 12, quoting United Mobile Homes v. Bollinger (Nov. 21, 1997), 3d Dist.
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No. 9-97-51, citing Myers v. E. Ohio Gas Co. (1977), 51 Ohio St.2d 121, 125, 364
N.E.2d 1369; Downtown Assoc., Ltd. v. Burrows Bros. Co. (1986), 34 Ohio
App.3d 296, 297, 518 N.E.2d 564. Therefore, when reviewing the lease
provisions in this case, we are to presume that the intent of the parties is in the
language they used, and if the contract is clear and unambiguous, then we must
follow the contract’s expressed terms and must not go beyond the plain language
of the contract. Housholder, 2008-Ohio-5313, at ¶ 12, quoting Bollinger, 3d Dist.
No. 9-97-57, citing Buckeye Union Ins. Co. v. Consol. Stores Corp. (1990), 68
Ohio App.3d 19, 24, 587 N.E.2d 391; First Natl. Bank of Cincinnati v. Cianelli
(1991), 73 Ohio App.3d 781, 785, 598 N.E.2d 789. In addition, when determining
the parties’ intent, a court must read the contract as a whole and give effect, if
possible, to every provision contained in the contract. Foster Wheeler
Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth. (1997), 78 Ohio
St.3d 353, 678 N.E.2d 519.
{¶19} Here, in its appellate brief, Jignaay cited the following language in
paragraph 17 of the master lease for justifying a finding of a breach of contract:
“nor shall [Jignaay] be named as a party defendant to any foreclosure of the lien.”
Based on this language, because Jignaay was named as a party defendant in the
foreclosure action with Abnet Realty, Jignaay claims Ben and Ken clearly
breached its contract. We disagree.
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{¶20} Jignaay has isolated only one portion of paragraph 17 in the master
lease. In its entirety, paragraph 17 states:
The LESSEE agrees that upon the request of the LESSOR(S), and
subject to the conditions hereinafter contained to subordinate its
right hereunder to the lien of any mortgage, deed or trust, or other
encumbrance, together with any renewals, extensions or
replacements thereof, now or hereafter placed, charged or enforced
against the premises, or any buildings or improvements included
thereon, or any portion or portions thereof. Provided, however, that
if this Lease or any renewal of it is in full force and effect and there
are no defaults thereunder on the part of the LESSEE, the right of
possession by the LESSEE to the leased premises and the LESSEE’s
rights arising out of this Lease shall be protected and not affected or
disturbed by the LESSOR(S), the mortgagee or the trustee in the
exercise of any of the mortgagee’s or trustee’s rights under the
mortgage or the deed of trust, nor shall the LESSEE be named as a
party defendant to any foreclosure of the lien of such encumbrance
nor in any way be deprived of its right under this Lease or any
renewal thereof. In the event that any mortgagee or trustee, or any
other person, acquires title to the leased premises, or any buildings
or improvements included thereon, pursuant to the exercise of any
remedy provided for in the mortgage or deed of trust, this Lease and
any renewal thereof shall survive, and shall not be terminated or
affected by said foreclosure or sale or any such proceedings, and the
mortgagee, the trustee and the LESSOR(S) for and on behalf of said
mortgagee and trustee agree that any sale of the premises, or the said
of any [sic] buildings or improvements included thereon, pursuant to
the exercise of any rights or remedies under the mortgage or deed of
trust, or otherwise shall be made subject to this Lease and any
renewal thereof and the rights of the LESSEE hereunder. The
parties hereto agree to execute or obtain the execution of such
reasonable documents as may be necessary to effectuate such
subordination.
{¶21} When reviewing this particular paragraph as a whole, it is clear that
the intent of the parties was to provide protection or a defense to a lessee in the
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event that there was ever a dispute challenging the lessee’s rights to the property.
This provision was not a promise by the other leaseholders (Ben and Ken) in
which they guaranteed that Jignaay’s rights would never be disturbed. Instead, it
was a promise that Jignaay’s rights would survive or be protected in the event of a
disturbance, as long as the lease was in effect and the lease payments were being
made.
{¶22} In fact, the party who did make the promise not to name Jignaay as a
party defendant in a foreclosure action was the mortgagee, Abnet Realty, who had
been a party to the master lease, which had been specifically incorporated into the
terms of the sub-sublease between Ben, Ken, and Jignaay. Therefore, if there was
any alleged breach of this paragraph, it was by Abnet Realty, who had promised
not to name the lessee as a party defendant. At the very least, when Jignaay was
named as a party defendant in the foreclosure action, Jignaay should have raised
this particular portion of the paragraph as a defense against Abnet Realty in its
foreclosure action. Nevertheless, as this provision specifically relates to Ben and
Ken, it is clear that the mere naming of Jignaay as a party defendant in the
foreclosure action was not a legal basis for finding a breach of contract.
{¶23} As to Jignaay’s second argument pertaining to its right to operate the
business, we believe that this was the actual basis for the trial court’s finding that a
breach of contract had occurred. This is clear from its language that stated:
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Harry Patel and the Jignaay defendants did not get what they
bargained for. They paid $135,000 for the right to run the Mountain
Top Inn for one hundred three months paying rent in the amount of
$3,100 per month. * * * They paid for the right to rent the motel for
one hundred three months; in fact, they occupied the same from May
2005 through July of 2008 or thirty-eight months. At the $135,000
price, they paid $1,310.00 per month for one hundred three months
for said right. They received thirty-eight months or $49,780.
Nevertheless, we believe that the trial court erred when it found that Ben and Ken
had breached the contract with Jignaay on the basis that Jignaay had not received
the benefit of its bargain.
{¶24} At the outset, we note that while interpreting lease agreements
involves a de novo standard of review, when determining whether the trial court’s
findings of fact were correct, the manifest-weight standard of review is used. In
determining whether a judgment is against the manifest weight of the evidence, we
cannot substitute our judgment for that of the trial court when there exists
competent, credible evidence going to all the essential elements of a case. C.E.
Morris Co. v. Foley Constr. Co. (1978), 54 Ohio St.2d 279, 280, 376 N.E.2d 578.
The trial court is in a better position to observe the demeanor of the witnesses,
examine the evidence, and weigh the credibility of the testimony and evidence.
Seasons Coal Co., Inc. v. Cleveland (1984), 10 Ohio St.3d 77, 80, 461 N.E.2d
1273.
{¶25} Here, the trial court found that Ben and Ken had breached their
contract with Jignaay with respect to its right to operate the motel business for 103
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months. To set forth a claim for breach of contract, a complaining party must
prove the following elements by a preponderance of the evidence: (1) a contract
existed, (2) the complaining party fulfilled its contractual obligations, (3) the
opposing party failed to fulfill its obligations, and (4) the complaining party
incurred damages as a result of this failure. Farmers State Bank v. Followay, 9th
Dist. No. 07CA0011, 2007-Ohio-6399, ¶ 13, citing Lawrence v. Lorain Cty.
Community College (1998), 127 Ohio App.3d 546, 548-549, 713 N.E.2d 478.
{¶26} It is clear from the record that two contracts existed between Ken
and Ben and Jignaay: (1) the sub-sublease agreement, and (2) the agreement to
purchase the motel business. Under the sub-sublease, Ken assigned all of his
rights and obligations in the master lease, with the exception of his obligation to
make rent payments, to Jignaay. Moreover, the terms of the master lease were
expressly incorporated into the sub-sublease. In addition to leasing the property,
Jignaay paid $135,000 in total for the right to operate the motel business through
the terms of the master lease, as extended pursuant to the option until December
10, 2013. Specifically, Jignaay paid $125,000 to Ben and $10,000 to Ken. All
three parties signed the sub-sublease. Therefore, we find that there was
competent, credible evidence to show that a contract did exist between the parties.
{¶27} However, we do not believe that there was competent, credible
evidence to show that Ken and Ben failed to perform under the contract, and in
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fact, we find that there was evidence to show that it was Jignaay who failed to
perform under the contract. It is undisputed that the mortgage in question became
delinquent in February 2002, that Jignaay had no knowledge of the underlying
default when it had signed the sub-sublease, and that Jignaay was never provided
any notice of the default prior to the foreclosure proceedings. Harry testified that
he eventually learned of the foreclosure proceedings sometime in December 2006
or January 2007. Subsequently, Abnet Realty added Jignaay, Ken, and Ben as
defendants to the foreclosure proceedings on June 26, 2007. Abnet Realty filed a
motion for summary judgment, and Jignaay filed a motion in opposition.
However, the trial court found that none of Jignaay’s arguments asserted any
claims against Abnet Realty or claimed any superior interest in the property;
therefore, the trial court entered a default judgment in favor of Abnet Realty and
ordered the property be sold at a sheriff’s sale. The property was eventually sold
at a sheriff’s sale to the mortgagee, Abnet Realty, on June 25, 2008, and while
Harry testified that he had been operating the motel throughout the foreclosure
proceedings, he said that after the sheriff’s sale he moved out of the motel on July
5, 2008.
{¶28} Even though Jignaay left the property after it was sold at the
sheriff’s sale, there is no evidence that Jignaay’s right to operate the motel was
being interfered with, or in other words, there is nothing in the record that
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demonstrates that Jignaay had been evicted or that it was even going to be evicted
in the near future. In fact, even though Harry testified that in light of the property
being foreclosed upon he did not believe he was able to use it, he admitted that he
was never evicted from the property by Abnet Realty.
{¶29} While there is no evidence in the record to support a finding that
Jignaay’s right to operate its business was breached by Ken or Ben, there is
evidence in the record that suggests Jignaay failed to perform its obligations under
the contract. The parties stipulated that Jignaay last paid its rental payments on
the motel property in April 2007, after the foreclosure proceedings had been
commenced. Although Harry testified that he had stopped paying rent in May
2007, not April, the fact remains that he stopped paying rent and performing his
obligation under the terms of the lease agreement before anyone had interfered
with his contractual rights. See Adaranijo v. Morris Invest. Co., 1st Dist. No. C-
070453, 2008-Ohio-2705, ¶ 9 (finding that the lease agreement had been
unaffected when the tenant failed to give adequate notice that complied with the
terms of the lease, thus the tenant’s failure to pay rent was a material breach of the
lease agreement and tenant was not entitled to a return of the deposit).
{¶30} Jignaay argues that according to the general rule regarding
foreclosures and subordinate property rights, the sale of the foreclosed property
automatically terminated his rights under the property. See Hembree v. Mid-Am.
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Fed. S. & L. (1989), 64 Ohio App.3d 144, 152, 580 N.E.2d 1103. Even if this
statement is true, a “rental agreement may include any terms which are not
inconsistent with or prohibited by law * * * or against public policy.” New Towne
L.P. v. Pier 1 Imports (U.S.), Inc. (1996), 113 Ohio App.3d 104, 108, 680 N.E.2d
644, citing Tillimon v. Dukes (Aug. 28, 1992), 6th Dist. No. L-91-343 (finding that
a lease agreement that had negated a landlord’s duty to mitigate damages did not
violate public policy). Although it is unusual, here the parties had contracted
around this particular situation and created a protection or defense to the lessees,
so long as they made their rent payments. Thus, under the terms of the master
lease, which was incorporated into the sub-sublease, Jignaay’s rights to the
property were protected even in the event of a foreclosure, and there is nothing in
the record that shows that this right was disturbed in any way.
{¶31} Moreover, we find it dispositive that Jignaay voluntarily abandoned
the property once the property had been sold to Abnet Realty at the sheriff’s sale.
Jignaay never raised anticipatory breach as one of its theories against Ken or Ben
in its cross-claim. If it had raised this theory, the trial court may have found that
leaving the motel property was reasonable under the circumstances. Nevertheless,
based on the record, there was not competent, credible evidence to show that a
breach had occurred since there was no evidence that Jignaay was or was going to
be evicted or forced off the property, and thus there was not competent, credible
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evidence to have justified Jignaay abandoning the property. See Gen. Dev. Corp.
v. Wilbur-Rogers Atlanta Corp. (1971), 28 Ohio App.2d 35, 36, 273 N.E.2d 908(finding that there was not such a constructive breach of the terms of the lease as
to give the lessee the right to vacate the property and to be relieved from further
payment of rent).
{¶32} Because we find that the trial court erred in finding that Ben
breached his contract with Jignaay, we find it unnecessary to address his
arguments pertaining to Jignaay’s damages.
{¶33} Ben’s second assignment of error is, therefore, sustained.
Ben’s third assignment of error
{¶34} In his third assignment of error, Ben argues that the trial court erred
by not ruling on his cross-claim against Ken. In particular, Ben claims that if
Jignaay’s breach-of-contract claim stands and Jignaay is entitled to damages, then
because Ken was Ben’s lessor, Ken should have to indemnify any damages Ben
must pay to Jignaay.
{¶35} For a cause to be justiciable there must “exist a real controversy
presenting issues which are ripe for judicial resolution and which will have a
direct and immediate impact on the parties.” State ex rel. Keller v. Columbus,
10th Dist. No. 05AP-52, 164 Ohio App.3d 648, 2005-Ohio-6500, ¶ 19, quoting
Eagle Fireworks, Inc. v. Ohio Dept. of Commerce, 4th Dist. No. 03CA28, 2004-
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Ohio-509. A claim based upon a future event that may or may not occur is not
ripe for review. Id. at ¶ 20. See also Cuthbert Greenhouse, Inc. v. Steele, 3d Dist.
No. 14-05-47, 2006-Ohio-6920, ¶ 10.
{¶36} Here, Ben filed a cross-claim on November 20, 2007, alleging
breach of contract, indemnification, fraud, negligence, breach of warranty, and
breach of duty against Ken.1 Subsequently, the trial court bifurcated all “cross-
claims” from the foreclosure action on March 27, 2008, and set them for trial on a
later date. A trial was held on December 30, 2008, but in its final judgment entry,
while the trial court ruled on all of Jignaay’s remaining causes of action, it failed
to rule on any of Ben’s causes of action against Ken. Thus, Ben’s cross-claim
against Ken is still pending and his third assignment of error concerning his cross-
claim against Ken is not ripe for our review.
{¶37} Therefore, Ben’s third assignment of error is overruled.
Ken’s assignment of error
{¶38} In Ken’s assignment of error, he argues that the trial court erred in
finding that he breached his contract with Jignaay and was thereby liable for
Jignaay’s damages. In particular, Ken claims that there was never any breach
because Jignaay was protected from a foreclosure under the terms of the master
1
In Ben’s original cross-claim, Harry’s name appeared in the caption; however, Ben filed an amended
cross-claim on November 28, 2007, that changed the name in the caption from Harry to Ken.
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Case No. 8-09-06
lease, there was no evidence that Jignaay was evicted or would have been evicted
in light of the foreclosure, and Jignaay made no effort to mitigate its alleged
damages.
{¶39} For the same reasons stated above in Ben’s second assignment of
error, we find that the trial court also erred when it found Ken liable for breach of
contract against Jignaay.
{¶40} Ken’s assignment of error is, therefore, sustained.
{¶41} Having found no error prejudicial to appellant Ben in the particulars
assigned and argued in appellant Ben’s first and third assignments of error, we
affirm the trial court’s judgment. However, having found error prejudicial to
appellants Ben and Ken in appellant Ben’s second assignment of error and
appellant Ken’s sole assignment of error, we reverse the trial court’s judgment and
remand the matter for further proceedings consistent with this opinion.
Judgment affirmed in part
and reversed in part,
and cause remanded.
WILLAMOWSKI and ROGERS, JJ., concur.
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