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Inc. v. A & A, Inc.

Court of Appeals of Ohio, Eighth District, Cuyahoga

June 6, 2019

5106 FRANKLIN, INC., Plaintiff-Appellant,
v.
A & A, INC., Defendant-Appellee.

          Civil Appeal from the Cleveland Municipal Court Housing Division Case Nos. 2016-CVG-04908 and 2017-CVG-16064

          Zukerman, Daiker & Lear Co., L.P A., Larry W. Zukerman, and Brian A. Murray for appellant.

          Dennis M. Coyne, and Wargo Law, L.L.C., and Leslie E. Wargo, for appellee.

          JOURNAL ENTRY AND OPINION

          LARRY A JONES, SR., J.:

         {¶ 1} This appeal arises out of a dispute between plaintiff-appellant, 5106 Franklin, Inc. ("5106 Franklin" or "landlord") and defendant-appellee, A & A, Inc., ("A & A") with respect to a commercial lease agreement that contained an option to purchase property located at 5106 Franklin Boulevard in Cleveland. For the reasons that follow, we affirm.

         Procedural History and Facts

         {¶ 2} On September 1, 2014, 5106 Franklin and A & A entered into a lease agreement for the premises located at 5106 Franklin Boulevard, that included a business, Ohio City Deli. Pursuant to the lease, the parties agreed that A & A had the right to exercise an option to purchase the property in the first five-year term of the lease. Specifically, section 3(c) of the lease provided:

Lessor agrees to sell and Lessee agrees to buy the premises for four hundred thousand dollars ($400, 000.00) during the first five years of the Lease only, at the option of the Lessee. If Lessee opts to purchase the [p]remises in the first 5-year term, Lessor agrees to finance said purchase for a 15 year term with $100, 000.00 down payment at reasonable commercial lending rates.

         {¶ 3} 5106 Franklin alleges that it started having problems with A & A as soon as the parties entered into the lease agreement. According to 5106 Franklin, A & A demanded that it reduce the previously agreed upon purchase price for the business, inventory, and assets of Ohio City Deli. 5106 Franklin alleges that A & A stopped paying monthly payments that were due under an asset agreement the two parties had previously executed. 5106 Franklin also alleges that A & A failed to pay the full amount of rent for July 2015, shorting the landlord $250.

         {¶ 4} On August 11, 2015, A & A sent a certified letter to 5106 Franklin notifying it that A & A was exercising its option to purchase the property. In response, 5106 Franklin informed A & A that it was in breach of its lease. According to 5106 Franklin, A & A violated the lease by renting the store premises to a movie production company to shoot a movie scene without permission. 5106 Franklin further alleges that when its representatives arrived at Ohio City Deli the day of the movie shoot, A & A representatives and employees shouted vulgarities at them. 5106 Franklin subsequently served a three-day notice to A & A to vacate the premises.

         {¶ 5} In August 2015, A & A filed a complaint for specific performance in Cuyahoga County Common Pleas Court. 5106 Franklin filed an answer and counterclaim, asserting a claim for forcible entry and detainer. A & A moved to dismiss 5106 Franklin's counterclaim based on jurisdiction, which the trial court granted, agreeing with A & A that Cleveland Municipal Court, Housing Division, had exclusive jurisdiction over 5106 Franklin's counterclaims. In June 2016, A & A moved to dismiss its claims without prejudice and that case was dismissed. 2016 Forcible Entry and Detainer Case - 2016-CVG-04908

         {¶ 6} On April 12, 2016, 5106 Franklin, represented by Attorney #1, filed a complaint for forcible entry and detainer and money damages in Cleveland Municipal Court, Housing Division, Case No. 2016-CVG-04908. A & A filed an answer and initial and amended counterclaims, asserting counterclaims for declaratory judgment, retaliation, tortious interference, and specific performance.

         {¶ 7} In July 2016, 5106 Franklin retained Attorney #2 and Attorney #1 withdrew from the case. In December 2016, A & A moved for summary judgment, which 5106 Franklin did not oppose. In March 2017, the trial court granted summary judgment in favor of A & A with respect to 5106 Franklin's claims and A & A's counterclaims for specific performance and declaratory judgment. The trial court set A & A's counterclaims for retaliation and tortious interference for trial.

         {¶ 8} In its order granting summary judgment, the trial court ordered 5106 Franklin to convey the property to A & A for the previously agreed upon purchase price of $400, 000. The court determined that, pursuant to the lease, 5106 Franklin was obliged to finance the purchase for a 15-year term with $100, 000 as a down payment at reasonable commercial lending rates.

         {¶ 9} In April 2017, A & A moved for sanctions against 5106 Franklin. 5106 Franklin, through Attorney #2, opposed the motion. In August 2017, the trial court issued an entry reflecting that the parties had reached a settlement, A & A was withdrawing its motion for sanctions, and A & As remaining counterclaims were dismissed without prejudice.

         {¶ 10} In October 2017, A & A filed a motion with the court seeking a monetary offset to the $400, 000 purchase price for the property, alleging that it had discovered that a portion of the premises needed $56, 125.00 in repairs and for its alleged loss of use of that portion of the property. 5106 Franklin opposed A & As motion and A & A eventually withdrew its motion.

         {¶ 11} In December 2017, 5106 Franklin, who had fired Attorney #2 and re-retained Attorney #1, moved for relief from judgment. The trial court denied the motion.

         {¶ 12} In February 2018, A & A filed a motion to show cause and for sanctions, alleging that 5106 Franklin was delaying the sale of the property. A hearing was held, but no transcript from the hearing exists (the hearing was apparently not recorded). The magistrate overseeing the hearing issued a decision setting forth detailed terms for the closing on the property. 5106 Franklin objected to the magistrate's decision. The court overruled the objections and specifically noted that the deadline for A & A to deposit $100, 000 into escrow was the date of closing.[1] 2017 Eviction Case - 2017-CVG-16064

         {¶ 13} On October 31, 2017, 5106 Franklin, through Attorney #2, filed a complaint for eviction against A & A and its president, Lina Sadeq, [2] in Cleveland Municipal Court, Case No. 2017-CVG-16064. In its complaint, 5106 Franklin alleged that it had served a notice of eviction on October 10, 2017, because A & A refused to pay rent pursuant to the lease agreement or close on the purchase of the premises.

         {¶ 14} In November 2017, A & A filed a motion to dismiss, which the trial court converted into a motion for summary judgment. 5106 Franklin, who was now represented by Attorney #1, opposed the motion. In January 2018, the ...


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