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Capital Real Estate Partners, LLC v. Nelson

Court of Appeals of Ohio, Twelfth District, Warren

June 17, 2019

CAPITAL REAL ESTATE PARTNERS, LLC, Appellee/Cross-Appellant,
v.
SAMUEL NELSON, et al., Appellants/Cross-Appellees.

          APPEAL FROM WARREN COUNTY COURT OF COMMON PLEAS Case No. 16CV88133

          Gregory A. Keyser, for appellee/cross-appellant

          Rittgers & Rittgers, Ryan G. McGraw, Konrad Kircher, for appellants/cross-appellees

          OPINION

          RINGLAND, J.

         {¶ 1} Appellants/Cross-Appellees, Samuel and Ellen Nelson, appeal the decision of the Warren County Court of Common Pleas granting summary judgment in favor of Appellee/Cross-Appellant, Capital Real Estate Partners, LLC ("Capital"). Capital also appeals the trial court's decision with respect to the payment of attorney fees. For the reasons detailed below, we affirm.

         {¶ 2} Capital is engaged in the business of brokering sales and leases of commercial, office, or industrial real estate. EK Prop, LLC, ("EK") previously owned property at 3751 Commercial Drive, Middletown, Ohio ("Property").

         {¶ 3} During its ownership of the Property, EK entered into an exclusive Leasing Listing Agreement with Capital. Pursuant to the Leasing Listing Agreement, EK agreed to use Capital as its exclusive agent to market and broker the Property. The Leasing Listing Agreement specified that EK agreed to pay Capital a six percent commission if there was a sale of the Property. In addition to the sale commission, EK also agreed to pay Capital a commission if the Property was leased. The written commission schedule provides that EK pay six percent of the base rent for the first 60 months of the lease period and three percent of the base rent for any remaining period longer than 60 months.

         {¶ 4} In 2011, Capital secured a lease of the Property to Barrett Paving Materials, Inc. and EK paid the agreed commission.

         {¶ 5} In June 2015, EK sold the Property to the Nelsons. In so doing, Capital brokered and closed the sale of the Property to the Nelsons for $1, 350, 000. As part of the closing between the Nelsons and EK, the Nelsons signed a document titled "Contract to Purchase Commercial-Industrial-Investment" ("Contract"). The Contract includes an addendum, which provides in pertinent part:

Buyer acknowledges that the current tenant of the Property was acquired via the exclusive leasing services of Capital Real Estate Partners, LLC ("Broker") under the terms of a Leasing Listing Agreement entered into between the Seller and Broker on or about January 31, 2011. Under the terms of the Schedule of Sales and Lease Commissions attached to and made a part of the Leasing Listing Agreement, Seller or its successors or assigns owes Broker for ongoing commissions due when/as/if the current tenant of the Property subsequently renews its lease. A copy of the Leasing Listing Agreement and the Schedule of Sales and Lease Commissions are attached hereto as Exhibit A. Under the terms of that agreement, the obligations for ongoing leasing commissions due to Broker for any and all subsequent renewals are to be transferred from the Seller to a future buyer at the time of closing. Buyer acknowledges these ongoing lease commission payment obligations due to Broker should the tenant renew its lease, and will execute any necessary documentation at closing to memorialize the transfer of these commission obligations from Seller to Buyer for Broker's benefit. Buyer's commitments to honor these ongoing commission obligations shall not merge with the deed; rather, these commission payment obligations shall survive closing until the current tenant's lease obligations (including any subsequent amendments thereto) are expired.

         {¶ 6} The Nelsons' signatures appear directly under the addendum. During the period of time prior to closing, the Nelsons were represented by counsel, who also reviewed the Contract and addendum. Following the sale, Capital was paid a sale commission pursuant to the terms of the Agreement.

         {¶ 7} Subsequently, the Nelsons renegotiated the lease with Barrett and executed a lease renewal. Upon learning of the lease renewal, Capital sent an invoice to the Nelsons for the commission owed by virtue of the Nelsons' assumption of the obligations provided in the Contract addendum. The Nelsons refused to pay, asserting that they did not realize their obligations under the Contract extended to paying Capital lease renewal commissions.

         {¶ 8} On January 7, 2015, Capital filed the instant action against the Nelsons, alleging breach of contract for failure to pay the lease commission following Barrett's lease renewal. Capital also brought claims for breach of contract and unjust enrichment against EK. All parties moved for summary judgment. After considering the motions, the trial court granted summary judgment in favor of Capital. The Nelsons now appeal, raising two assignments of error for review. Capital also cross-appeals the trial court's decision with respect to the denial of attorney fees.

         {¶ 9} ...


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