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Cocca Development Ltd. v. Mahoning County Board of Commissioners

Court of Appeals of Ohio, Seventh District

September 16, 2013

COCCA DEVELOPMENT LTD., PLAINTIFF-APPELLANT CROSS-APPELLEE
v.
MAHONING COUNTY BOARD OF COMMISSIONERS, DEFENDANT-APPELLEE CROSS-APPELLANT

Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 07 CV 3005

For Plaintiff-Appellant/Cross-Appellee: Atty. William A. Myers

For Defendant-Appellee/Cross-Appellant: Atty. Paul J. Gains Mahoning County Prosecutor Atty. Gina DeGenova Bricker Assistant Prosecuting Attorney

JUDGES: Hon. Cheryl L. Waite Hon. Gene Donofrio Hon. Mary DeGenaro

OPINION

WAITE, J.

(¶1} This case began seven years ago in a breach of contract complaint involving a commercial lease. In 2001, Appellant Cocca Development Ltd. entered into a 10-year lease with 7655, LLC to lease space in the Southwoods Executive Center ("Southwoods") in Boardman, Ohio. Appellee Mahoning County Board of Commissioners ("MCBC") is the successor in interest to 7655, LLC. The space was to be used by Mahoning County Educational Service Center ("MCESC"). At the time the lease was entered, MCBC was required by statute to provide space for MCESC. This statutory requirement was phased out in January of 2007, and later that year MCBC stopped paying rent on the leased premises. In August, 2007, MCESC entered into a new 10-year lease with Appellant for a different space in Southwoods. Appellant then sued MCBC for breach of the 2001 lease. The trial court ruled in favor of MCBC, but on appeal we held that MCBC did breach the lease, and the case was remanded to determine damages and any mitigation of damages. Cocca Dev. v. Mahoning Cty. Bd. of Commrs., 7th Dist. No. 08 MA 163, 2010-Ohio-3166 (hereafter "Cocca I").

(¶2} On remand, the trial court ruled that the value of the remaining portion of the 2001 lease was $1, 172, 393.22. The court also ruled that Appellant had mitigated its damages by entering into a new lease with MCESC in 2007. The remainder of the 2001 lease and the first part of the 2007 lease overlapped by approximately 40 months. This 40-month period was valued at $625, 439.89, and this amount was deducted from the total damage award of $1, 172, 393.22, leaving a net damage amount of $546, 953.33. Both parties appeal the judgment of the trial court regarding its calculation of damages.

(¶3} Appellant argues that the 2007 lease between Appellant and MCESC should not serve to mitigate damages, as it was a contract for separate premises with a third-party tenant. Appellant contends that it acted with all reasonable commercial practicability to attempt to mitigate damages regarding the space described in the 2001 lease, but no tenant was found for that specific space. Appellant does not believe that a lease (it describes as unrelated), for a different space in the same building, should act to reduce the damage award.

(¶4} Appellee argues on cross-appeal that all of its damages were successfully mitigated, because the 2007 lease will generate more money than the 40 months of the 2001 lease that were left unpaid after that lease was breached. Appellee further argues that to allow Appellant to receive any amount in damages would leave it in a better position than it would have under the original agreement. Appellee concludes that the trial court erred in awarding any amount of damages.

(¶5} Both parties are incorrect. The issue on remand was the calculation of damages, which includes a consideration as to whether the damages were mitigated in some degree. Since the 2007 base with MCESC overlapped the last 40 months of the 2001 lease, and the 2007 lease was for similar premises with the same occupant, the court found that part of the 2007 lease should be applied in mitigation of damages. The court did not use the entire value of the 2007 lease to mitigate damages because it covered a considerable period of time after the 2001 lease was to have expired. The period of time used by the trial court corresponds to the current law regarding mitigation of damages in Ohio in cases involving breach of a commercial lease. The judgment of the trial court is affirmed.

BACKGROUND

(¶6} The facts of this case are undisputed and are set forth in Cocca I. In order to discharge a statutory duty imposed by R.C. 3319.19, MCBC entered into a contract with Appellant to rent property located at Southwoods to provide office space for MCESC on February 15, 2001. The lease agreement contained the following clause:

The Premises shall be occupied and used for the general office purposes of the Mahoning County Educational Service Center and for ...

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