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New Asian Super Market v. Weng

Court of Appeals of Ohio, Tenth District

March 30, 2018

New Asian Super Market, Plaintiff-Appellee,
v.
Jiahe Weng, et al., Defendants-Appellants.

          APPEAL from the Franklin County M.C. No. 2016 CVG 40086 Municipal Court

         On brief:

          Willis Law Firm LLC, and Michael J. Cassone, for appellee.

          Abroms Law Office, and Hillard M. Abroms, for appellants.

         Argued:

          Michael J. Cassone.

          Hillard M. Abroms.

          DECISION

          BRUNNER, J.

         {¶ 1} This matter commenced as an action for restitution of the premises filed in the Franklin County Municipal Court by plaintiff-appellee, New Asian Super Market ("landlord"), against defendants-appellants, Jiahe Weng and Magnificent, LLC ("tenants"). Landlord brought suit for restitution of a leased commercial premises, alleging tenants had breached a lease agreement. Tenants filed an answer and counterclaimed for damages exceeding the municipal court's jurisdiction limitation. A magistrate conducted the trial solely on landlord's claim for restitution of the premises after bifurcating it from tenants' counterclaim. Tenants have appealed the judgment of the Franklin County Municipal Court entered on March 14, 2017 adopting the magistrate's decision that landlord was entitled to restitution or possession of the premises. Because we find that bifurcation of the counterclaim for damages was improper and that the matter should have been transferred in its entirety to the Franklin County Court of Common Pleas, we reverse the decision of the trial court and remand the matter for action consistent with this decision.

         I. FACTS AND PROCEDURAL BACKGROUND

         {¶ 2} On or about December 14, 2015, landlord and tenants executed a lease for a commercial building located at 3635 West Dublin-Granville Road in Columbus, Ohio. Landlord had operated the building as a grocery store, and tenants desired to convert it to a restaurant. Yong Cun Huang signed the lease on behalf of landlord New Asian Super Market, and Jiahe Weng "individually and representing Magnificent LLC" signed the lease on behalf of tenants. (Ex. A, attached to Dec. 20, 2016 Compl.) Under the lease's terms, tenants were required to pay rent on or before the first day of the month, beginning May 1, 2016.

         {¶ 3} The lease required landlord to keep and maintain certain structural portions of the building, including the roof. The lease also contained a handwritten provision for other repair work to be undertaken by landlord, as follows:

Landlord's Work:
Landlord shall install new HVAC at landlord's expense before rent commencement date. It shall not delay Tenant's remodeling and opening. Tons of HVAC must satisfy the restaurant needs. Landlord shall provide one year warranty of HVAC.
Landlord shall repair parking before rent commencement date.

(Ex. A at 41, Compl.) Landlord and tenants had signed off on the handwritten provision.

         {¶ 4} It is undisputed that tenants did not pay rent for five months from May 1 until October 2016, at which time they paid $15, 000. Landlord alleged tenants did not timely tender rent for November and December 2016. On December 15, 2016, landlord gave tenants notice of default under R.C. 1923.04 and to vacate the premises. (Ex. B, attached to Compl.) Nothing in the record indicates landlord demanded payment of rent before issuing the notice.

         {¶ 5} On December 20, 2016, landlord filed a complaint for restitution of the premises, in forcible entry and detainer, alleging tenants were in default of the lease agreement as of May 1, 2016 for failing to pay rent as agreed; that landlord had duly served tenants with notice under R.C. 1923.04 to vacate the premises; that landlord was entitled to immediate possession of the premises; and that tenants were unlawfully and forcibly detaining the premises. Landlord requested judgment for immediate restitution and costs.

         {¶ 6} On January 9, 2017, tenants filed their answer to landlord's complaint, with defenses that the lease and parts of it were void and unenforceable. Tenants also offered affirmative defensives and counterclaimed for damages.[1] Tenants counterclaimed that they had entered into an oral partnership/member/business agreement with landlord under which landlord represented it would waive tenants' rent for the months of May, June, July, and August 2016 as consideration for landlord receiving a 25 percent partnership/business interest in Magnificent, LLC. Tenants further counterclaimed that landlord promised tenants it would repair the roof and replace the HVAC of the leasehold premises before tenants took possession. Tenants counterclaimed that landlord made false representations on the waiver of rent and roof and HVAC repairs and that tenants detrimentally relied on them, incurring significant monetary damages. Tenants counterclaimed specifically:

10. Defendant was damaged in an amount to be determined at trial, by the misrepresentation and suffered damages from Plaintiffs fraud and fraudulent inducement, including lost revenue, the costs of improvements to the premises, and damages to the Defendant's business reputation caused by delay in opening the restaurant and in lost business due to a leaky roof and non-functioning HVAC unit, and the costs of having to defend this action, in excess of $500, 000.00.
11. On account of Plaintiffs failure to abide by the partnership/business agreement, Defendant is entitled to dissolution of the partnership/business agreement and/or cancellation of the LLC membership interest of Plaintiff, and damages for Plaintiffs breach of the duty of loyalty.
12. Defendants are entitled to their actual money damages, attorney's fees, punitive damages, and the costs of this action.

(Jan. 9, 2017 Answer & Counterclaim at ¶ 10-12.)

         {¶ 7} The trial court's magistrate conducted a two-day bench trial on January 10 and 17, 2017. On the first day of the trial, January 10, and before any witnesses testified, tenants' counsel argued "merger and jurisdiction" such that, "to preserve the tenants' rights, possession and [to] guarantee the existence of a fund to settle the various claims that matters merge and should all be heard together because of the defenses that were raised as well as the counterclaims." (Jan. 10, 2017 Tr. at 11.) Tenants' counsel stated that tenants had improved the subject property by $400, 000. Counsel for landlord responded that the only matter before the magistrate was the issue of possession and requested that the magistrate bifurcate from landlord's complaint for possession, the monetary issues, and associated partnership claim raised in tenants' counterclaim. The magistrate overruled tenants' objections that the eviction would cause tenants irreparable damage based on tenants' concerns about landlord's promise to repair the roof and HVAC system. Instead, ...


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