from the Franklin County M.C. No. 2016 CVG 40086 Municipal
Law Firm LLC, and Michael J. Cassone, for appellee.
Law Office, and Hillard M. Abroms, for appellants.
Michael J. Cassone.
Hillard M. Abroms.
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.
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 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
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. 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
(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, ...