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L.I. Development-Ohio, L.L.C. v. 6150 Som Center Road, L.L.C.

Court of Appeals of Ohio, Eighth District, Cuyahoga

August 29, 2019

L.I. DEVELOPMENT-OHIO, L.L.C., Plaintiff-Appellant,
v.
6150 SOM CENTER ROAD, L.L.C., ET AL. Defendants-Appellees.

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-16-873351

         JUDGMENT: AFFIRMED

          Kasputis Law Firm, L.L.C., Edward F. Kasputis, for appellant.

          Charles V. Longo, Co., L.P A., Charles V. Longo, and Emily K. Anglewicz, for appellees.

          JOURNAL ENTRY AND OPINION

          MARY EILEEN KILBANE, ADMINISTRATIVE JUDGE

         {¶ 1} Plaintiff-appellant, L.I. Development-Ohio, L.L.C. ("L.I. Development"), appeals the trial court's decision granting summary judgment in favor of defendants-appellees, George Lonjak ("Lonjak"), Brooke DiFante ("DiFante"), and Scott Fisher ("Fisher") (collectively referred to as "individual defendants"). For the reasons set forth below, we affirm.

         {¶ 2} The instant appeal arises from a breach of lease and unjust enrichment action filed by L.I. Development against 6150 SOM Center Road, L.L.C. ("Tenant") and the individual defendants. L.I. Development is the owner of commercial property located at 6150 SOM Center Road in Solon, Ohio. In December 2009, L.I. Development, as landlord, entered into a five-year commercial lease agreement with Tenant. Tenant operated a Panini's restaurant in the rental space with the basic monthly rent payment of $15, 000.

         {¶ 3} Tenant signed the lease through Lonjak, as its managing member, and Lonjak, DiFante, and Fisher signed in their personal capacity as guarantors for the performance of Tenant's obligations under the lease. The individual defendants were members of and owned an equity interest in Tenant. The original lease commenced on June 1, 2009, and expired on May 31, 2015. On May 1, 2014, L.I. Development and Tenant executed a five-year extension to the original lease to commence on June 1, 2015, and expire on May 31, 2020. The lease extension consisted of a letter addressed to L.I. Development stating that Tenant "gives notice to exercise its option for a period of five (5) years[.] It is further understood that the rent for the renewal term shall be determined per Section 21.02 of the Lease." Lonjak was the only individual defendant whose signature appeared on the letter. None of the individual defendants executed a separate guaranty with respect to the extension.

         {¶ 4} L.I. Development alleges that on June 10, 2016, the Tenant breached the lease by vacating the premises and not paying rent and other payments due under the lease. L.I. Development alleges that it has been unable to mitigate its damages by re-renting the property.

         {¶ 5} L.I. Development seeks the balance of unpaid rent, taxes, and other expenses it alleges are due through the remainder of the renewal term in the amount of $494, 59144, with interest calculated per annum at 18 percent from June 1, 2016, and $12, 857.25 in attorney fees.

         {¶ 6} The matter proceeded to arbitration, where it was determined that the individual defendants were not liable to L.I. Development. L.I. Development appealed the arbitration decision. The matter then returned to the trial court's docket where the individual defendants moved for summary judgment. They argued that the lease guaranty applied only to the original lease, which expired on May 31, 2015, and the lease extension does not demonstrate any intention to bind the individual defendants for rent payments beyond the original lease term. L.I. Development opposed and filed its own motion for summary judgment, which the trial court struck as untimely.[1]

         {¶ 7} The trial court granted summary judgment in favor of the individual defendants. In its thorough opinion, the court stated:

The Court finds, construing the Lease, Lease Guaranty, and Lease Renewal, that the agreements are ambiguous as to whether the Individual Defendants guaranteed Tenant's obligations beyond the original Lease term.
Section 21.02 of the Lease, which incorporates the Lease Guaranty into the Lease, limits the Guaranty to "[t]his Lease" and omits any reference to renewal. Section 21.02 is ambiguous and could reasonably be construed to limit the Guaranty to the original Lease term. Similarly, the Lease Guaranty does not state it includes any renewal term and limits [L.I. Development's] recourse against the Individual Defendants for non-payment to "this Guaranty." Sections 1(e) and 2 of the Guaranty, which state the Individual Defendants waive "notice of any extensions granted," are also ambiguous as to whether the Individual Defendants waive their consent in the future where Tenant requests an extension or otherwise exercises an option to renew the Lease. Further, the Lease Renewal itself is ambiguous as it purports to exercise Tenant's option to renew, but fails to include any personal guaranty requirement or otherwise reference the Guaranty, and fails to include the Individual Defendants as signatories. In accordance with the law, the Court construes ambiguities in the agreements as limiting the Lease Guaranty to the original term of the Lease.
Therefore, The Court finds reasonable minds could not conclude there existed meeting of the minds between [L.I. Development] and the Individual Defendants sufficient to establish guaranty contract for the Renewal term. The Court further finds the Lease Renewal is inapplicable as to the Individual Defendants, and that their obligations to [L.I. Development] ended upon expiration of the original Lease, May 31, 2015. To give effect otherwise would permit construction of the Lease and Lease Guaranty where Tenant could unilaterally bind the Individual Defendants to extensions without their consent. The Lease, Lease Guaranty, and Lease Renewal failed to put the Individual Defendants on notice that the agreements could be construed in such manner, nor does the record demonstrate they intended such result.

         {¶ 8} It is from this order that L.I. Development appeals, raising the following single ...


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