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Parkhill Limited Liability Co. v. Economic and Community Development Institute, Inc.

Court of Appeals of Ohio, Eleventh District, Lake

August 26, 2019

PARKHILL LIMITED LIABILITY COMPANY, Plaintiff-Appellant,
v.
ECONOMIC AND COMMUNITY DEVELOPMENT INSTITUTE, INC., Defendant-Appellee.

          Civil Appeal from the Lake County Court of Common Pleas, Case No. 2016 CV 000174.

         Judgment: Affirmed.

          Jeffrey W. Ruple, Deacon Cardenas & Ruple, LLC, For Plaintiff-Appellant.

          Ezio A. Listati, and Joseph N. Cindric, Thrasher, Dinsmore & Dolan, LPA, For Defendant-Appellee.

          OPINION

          CYNTHIA WESTCOTT RICE, J.

         {¶1} Appellant, Parkhill Limited Liability Company ("Parkhill"), appeals the judgment of the Lake County Court of Common Pleas, awarding it $854.80 in damages as a result of the breach of a Subordination Agreement by appellee, Economic and Community Development Institute, Inc. ("ECDI"). For the reasons discussed in this opinion, we affirm the trial court's judgment.

         {¶2} In 2012, Parkhill, a commercial landlord, leased commercial space to a tenant, non-party Merholz. Merholz's annual rent for the years 2014 and 2015 was approximately $31, 200. To assist with her finances, Merholz obtained a loan from ECDI and used her office equipment in the rented space as collateral. Parkhill and ECDI eventually entered into a Subordination Agreement, which provided Parkhill would give up its rights to Merholz's personal property in favor of ECDI and, in turn, Parkhill would be entitled, upon default by Merholz and a set grace period in which ECDI was entitled to remove the property, to charge ECDI the rate of rent on a per diem basis until the collateral is removed. The following provisions of the Subordination Agreement are germane to this case:

         {¶3} 3. Subordination.

         {¶4} Landlord [Parkhill] hereby consents to Lender's [ECDI's] security interest (or other interest) in the Collateral and hereby subordinates all interests, liens and claims that Landlord has or may hereafter acquire in the Collateral to the interests, liens and claims of Lender. Landlord agrees that any subordinate lien or claim it may now have or hereafter have in the Collateral will be subject to the rights granted by Landlord to Lender in this agreement.

         {¶5} 4. Entry.

         {¶6} Landlord and Borrower grant to Lender the right to enter upon the Premises for purpose of removing the Collateral from the Premises * * * within twenty days from the notice of default thereafter Lender will pay the rate of rent of borrower calculated on a per diem basis until collateral is removed.

         {¶7} 5. Miscellaneous Provisions.

         {¶8} The rights granted to Lender in this Agreement will continue for thirty (30) days after lender receives notice in writing from the Landlord that Borrower no longer is in lawful possession of the Premises. * * * Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is in writing and signed by Lender. * * * Without notice to Landlord and without affecting the validity of this Agreement, Lender may do or not do anything it deems appropriate or necessary with respect to the Loan, any obligors on the Loan, or any Collateral for the Loan; including without limitation extending, renewing, rearranging, or accelerating any of the Loan indebtedness.

         {¶9} Merholz failed to pay her rent and Parkhill notified ECDI of the failure on October 1, 2014. Pursuant to its rights under the agreement, ECDI sent its representative, Erin Fach, to inspect the collateral. After the inspection, on October 29, 2014, Fach sent an email to Parkhill's representative, Urban Cornacchione, that ECDI would have "something finalized" for removal of the collateral within a "few days." Cornacchione acknowledged the email and requested the Fach let him know regarding the arrangements because he "will need to have [Parkhill's] lease administration department calculate the per diem rent based on the date [Fach] provide[s]." No subsequent communications occurred between the parties or their representatives. Parkhill kept the collateral in the rental unit until it was re-leased on October 21, 2015 (366 days from the date ECDI was allegedly responsible for per diem rental amount under the ...


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