Brown v. Spitzer Chevrolet Co.

910 N.E.2d 490, 181 Ohio App. 3d 642, 2009 Ohio 1196
CourtOhio Court of Appeals
DecidedMarch 16, 2009
DocketNo. 2008CA00033.
StatusPublished
Cited by5 cases

This text of 910 N.E.2d 490 (Brown v. Spitzer Chevrolet Co.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Spitzer Chevrolet Co., 910 N.E.2d 490, 181 Ohio App. 3d 642, 2009 Ohio 1196 (Ohio Ct. App. 2009).

Opinions

Hoffman, Presiding Judge.

{¶ 1} Defendant-appellant and cross-appellee, Spitzer Chevrolet Co. (“Spitzer”), appeals the January 14, 2008 judgment entry entered by the Stark County Court of Common Pleas, which overruled appellant’s objections to the magistrate’s June 15, 2007 decision and approved and adopted that decision granting judgment in favor of plaintiffs-appellees and cross-appellants, Earl W. Brown et al. (“the Browns”), and awarding damages to the Browns in the amount of $503,852,211 as an order of the court.

*647 STATEMENT OF THE CASE AND FACTS

{¶ 2} On October 10, 2006, the Browns filed a complaint in the Stark County Court of Common Pleas, naming Spitzer as defendant and asserting claims for breach of lease agreement, negligence, and unjust enrichment. Spitzer filed a timely answer. The matter proceeded to trial before the magistrate on April 23, 2007.

{¶ 3} The following evidence was presented at trial. The Browns owned commercial property located at 407 North Main Street, North Canton, Stark County, Ohio (“the property”). The property was purchased in 1922 by Earl Brown’s father, Julius Brown, who built and operated an automobile dealership thereon. From 1922 through March 2005, the property was continuously used as an automobile dealership. The property consists of approximately 1.28 acres of land upon which the original 1922 showroom building, an attached service building constructed in 1963 by W & J Chevrolet, and an asphalt parking lot are situated.

{¶ 4} Spitzer purchased the Chevrolet franchise from W & J Chevrolet and subsequently leased the property from the Browns. Prior to executing the lease with Spitzer, the Browns had the property appraised by D.F. Smith Agency. The appraisal stated that the fair-market value of the property was $319,000, as of June 24, 1983. The appraisal rated the overall condition of the property as “good” and did not note any defects. The parties executed the first lease on December 12, 1983. The first lease was for a period of five years, with an option for Spitzer to renew the lease for two additional five-year periods, for a potential lease term of 15 years.

{¶ 5} Under the provisions of the first lease, Spitzer paid $3,000 per month for the first 30 months and $3,300 per month for the second 30 months and paid all utilities, taxes, and insurance on the property. The lease also obligated Spitzer to “make all repairs necessary to the demised property and the building and appurtenances situated thereon in as good order and condition as when delivered to it.” Within ten days of the date of possession, Spitzer was to inspect the premises and notify the Browns of any defects in the property. Spitzer never notified the Browns of any defects in the property during the contractual ten-day period, despite arguing at trial that the property was in poor condition. Spitzer made several repairs and improvements to the property after taking possession. The repairs and improvements included erecting pole lights around the parking lot, painting the interior and exterior of the building, constructing a new showroom barrel roof, adding exterior wood trim, and installing a new rooftop heating and air conditioning unit. Spitzer also added a rear asphalt parking lot in 1987, replaced the sewer line in 1991, installed a new boiler in 1997, and installed a new air-conditioning unit in 1999.

*648 {¶ 6} The parties entered into a second lease on April 28, 1994. Like the first lease, the second lease was for a period of five years. At trial, Spitzer stipulated that it authored the second lease, as well as all subsequent leases. The second and all subsequent leases required Spitzer to pay all taxes and utilities on the property. Under the second lease, the rent increased to $4,316.80 per month. Spitzer did not notify the Browns of any defects in the condition of the property prior or subsequent to signing the second lease.

{¶ 7} From the inception of the first lease, Spitzer intended to relocate the dealership. Spitzer and General Motors Corporation executed a relocation agreement and business plan on June 5, 1998. Spitzer had previously purchased property for the relocation of its dealership. In April 2000, Spitzer notified the Browns of its intent to move the dealership to its new location in December 2000 and proposed an increase in rent of $430 per month. The move was ultimately delayed due to protests filed by other area Chevrolet dealers. On December 5, 2000, Spitzer advised the Browns that it anticipated moving the dealership within three years and proposed a month-to-month lease agreement with yearly rent increases of $4,800, $5,000, and $5,200 per month. Spitzer also proposed that the parties enter into an option under which Spitzer could purchase the property for $600,000 or the Browns could purchase, for $400,000, real property owned by a Spitzer-affiliated company and adjacent to the property.

{¶ 8} The Browns obtained an appraisal of the property from Dannemiller Appraisal Services. The appraisal determined, as of December 18, 2000, the fair-market value of the property to be $600,000. The Browns sent a letter to Spitzer on March 29, 2001, indicating their willingness to enter into a third lease with the rent terms as previously proposed by Spitzer. Although the Browns offered to sell the property, they advised Spitzer that they were not interested in purchasing the adjacent property. Thereafter, on September 1, 2001, the parties entered into a third lease, with a two-year term. Under the terms of the third lease, the rent increased to $4,800 per month for the first year and $5,000 per month for the second year. Spitzer had the option to continue its occupancy on a month-to-month basis until August 31, 2004. The rent under this option increased to $6,000 per month. The third lease required Spitzer to pay all utilities, taxes, and insurance on the property. Spitzer was required to increase the insurance from $550,000 to $650,000. The third lease included an option for Spitzer to purchase the property for $650,000. Spitzer did not notify the Browns of any defects in the condition of the property when entering into the third lease.

{¶ 9} On March 13, 2003, a Spitzer employee contacted the Browns and notified them of a pi-oblem with one of the service-area garage doors. The Browns visited the property in order to inspect the door and found the basement structural steel to be seriously deteriorated. The Browns showed Kevin Spitzer *649 the deterioration. Spitzer informed the Browns that he would have his builder look at the basement and he would take care of the situation. No evidence or testimony was presented at trial to establish that Spitzer ever addressed the condition of the basement structural steel. Spitzer was unable to move the dealership by the projected date of August 31, 2004; therefore, on September 28, 2004, the parties entered into a fourth lease, for a six-month period. The fourth lease was identical to the second and third leases, except for the surrender provision. Under the fourth lease, the surrender provision was modified to require Spitzer to “surrender the premises in as good condition as they were at the beginning of the occupancy.” The second and third leases used the word “term” rather than “occupancy.”

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Cite This Page — Counsel Stack

Bluebook (online)
910 N.E.2d 490, 181 Ohio App. 3d 642, 2009 Ohio 1196, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-spitzer-chevrolet-co-ohioctapp-2009.