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Wal-Mart Realty Co. v. TRI-County Commons Associates, LLC

Court of Appeals of Ohio, First District, Hamilton

December 29, 2017

WAL-MART REALTY COMPANY, Plaintiff-Appellee,
v.
TRI-COUNTY COMMONS ASSOCIATES, LLC, Defendant, and 2NDS IN BUILDING MATERIALS, INC., d.b.a. HOME EMPORIUM, Defendant-Appellant.

         Civil Appeal From: Hamilton County Court of Common Pleas Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Cause TRIAL NO. A-1504589

          Keating, Meuthing & Klekamp, Daniel E. Izenson and Meaghan K. FitzGerald, for Plaintiff-Appellee,

          Kimberly A. Kyle, for Defendant-Appellant.

          OPINION

          Deters, Judge.

         {¶1} Defendant-appellant 2NDS in Building Materials, Inc., d.b.a. Home Emporium ("2NDS") appeals from the decision of the Hamilton County Court of Common Pleas granting summary judgment in favor of plaintiff-appellee Wal-Mart Realty Company ("Wal-Mart"). We find merit in 2NDS's sole assignment of error. Consequently, we reverse that part of the trial court's judgment granting Wal-Mart's motion for summary judgment, and we remand the cause for further proceedings.

         {¶2} The record shows that Wal-Mart filed a complaint for breach of contract seeking reimbursement for repairs to and/or replacement of 28 vandalized rooftop HVAC units on commercial property it had leased from defendant Tri-County Commons Associates, Inc., ("TCCA"). The property was actually occupied by 2NDS, which had subleased the property from Wal-Mart. The trial court dismissed all of Wal-Mart's claims against TCCA for failure to state a claim upon which relief could be granted.

         {¶3} In the sublease, Wal-Mart was the sublessor and 2NDS was the sublessee. TCCA was referred to as the "Prime Landlord." Both Wal-Mart and 2NDS filed motions for summary judgment based on the language of the sublease. Section 11.2 of the sublease, entitled "Repairs by Prime Landlord, " provided:

Except for repairs or maintenance necessitated by Sublessee's alterations, changes or modifications, * * * Sublessor and Sublessee agree that it is Prime Landlord's responsibility at all times to maintain and keep in good repair the roof and all structural portions of the building, the exterior of the building, to make such interior repairs and replacements that may be necessary as a result of damage or destruction by fire, the elements, or casualty and for HVAC unit replacement.

         {¶4} The trial court found this provision to be unenforceable. It stated: The parties also agreed in Section 11.2 that the Prime Lessor, Tri-County Commons Associates, LLC is responsible for damage or destruction of the HVAC system. This is unenforceable. Two parties simply cannot bind a 3rd party to responsibilities for which the 3rd party does not expressly agree. Tri-County is not a party to the sublease nor is there any writing indicating it agreed to be bound by Section 11.2.

         {¶5} In granting summary judgment in favor of Wal-Mart, the trial court relied on section 11.1 of the sublease, entitled "Repairs by Sublessee." That section provided in pertinent part: "Sublessee shall maintain and replace the component parts of the heating, ventilation and air conditioning system (HVAC), including but not limited to compressors, and equipment serving the Subleased Premises." It further provided that "[i]n particular, from the Delivery Date, Sublessee shall institute and diligently follow the HVAC maintenance regimen[.]" It then set forth 20 items that 2NDS was to perform either quarterly or annually, including replacing filters, inspecting belts and sleeves, inspecting various pieces of equipment, and checking pressure and temperatures. The court stated that "Section 11.1 of the Sublease mandates that [2NDS] complete the work related to the vandalism of the HVAC units

         {¶6} The court found that 2NDS was in breach of the sublease and that Walmart was entitled to summary judgment on the issue of liability. It ordered 2NDS to reimburse Walmart for the repair and replacement costs of the HVAC units, plus prejudgment and post-judgment interest. This appeal followed.

         {¶7} In its sole assignment of error, 2NDs contends that the trial court erred in granting summary judgment in favor of Wal-Mart and in denying its motion for summary judgment. It argues that under the plain language of the sublease, it was not responsible for replacing the HVAC system. We agree that the trial court erred in granting summary judgment in favor of Wal-Mart, although not precisely for the reasons argued by 2NDS.

         {¶8} An appellate court reviews a trial court's ruling on a motion for summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996); Riverhills Healthcare, Inc. v. Guo, 1st Dist. Hamilton No. C-100781, 2011-Ohio-4359, ¶ 12. Summary judgment is appropriate if (1) no genuine issue of material fact exists for trial, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party, who is entitled to have the evidence construed most strongly in his or her favor. Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977); Alexander v. Motorists Mut. Ins. Co., 1st Dist. Hamilton No. C-110836, 2012-Ohio-3911, ¶ 16. The trial court has an absolute duty to consider all pleadings and evidentiary material when ruling on a motion for summary judgment. It should not grant summary judgment unless the entire record shows that summary judgment is appropriate. Alexander at ¶ 16.

         {¶9} A lease is a contract to be interpreted like any other contract. Stephen Bus. Ent., Inc. v. Lamar Outdoor Advertising Co., 1st Dist. Hamilton No. C-070373, 2008-Ohio-954, ¶ 13. The interpretation of a written instrument is, in the first instance, a matter of law for the court. If it is clear and unambiguous, the court need not go beyond the plain language of the agreement to determine the parties' rights and obligations. Instead, the court must give effect to the contractual language. Aultman Hosp. Assn. v. Community Mut. Ins. Co.,46 Ohio St.3d 51, 53, 544 N.E.2d 920 (1989); Fifth Third Bank v. Ducru Ltd. Partnership, 1st Dist. Hamilton No. C-050564, 2006-Ohio-3944, ΒΆ 14. But if the provisions of a contract are ambiguous, an ...


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