Campanella v. Commerce Exchange Bank

745 N.E.2d 1087, 139 Ohio App. 3d 796
CourtOhio Court of Appeals
DecidedSeptember 19, 2000
DocketNo. 76772.
StatusPublished
Cited by13 cases

This text of 745 N.E.2d 1087 (Campanella v. Commerce Exchange Bank) 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
Campanella v. Commerce Exchange Bank, 745 N.E.2d 1087, 139 Ohio App. 3d 796 (Ohio Ct. App. 2000).

Opinion

James M. Porter, Judge.

Defendant-appellant Commerce Exchange Bank (“Commerce”) appeals from a judgment following a jury trial in favor of plaintiffs-appellees Robert P. Campanella and his wholly owned company, Robert P. Campanella and Associates, in the amount of $24,530.66 plus, prejudgment interest. Defendant Commerce contends the trial court erred in not granting its motions for summary judgment, a directed verdict or j.n.o.v. based on the doctrine of collateral estoppel. Defendant also contends that the verdict was against the manifest weight of the evidence and that the trial court erred in failing to properly instruct the jury and in awarding prejudgment interest. We reverse the judgment in part and affirm in part based on conditions.

This case arises from a claim by the Campanellas that Commerce is contractually liable for rent of premises on which a bankrupt corporation left certain equipment in which Commerce had a security interest. A detailed narration of the background facts is essential to understanding key issues at stake on this appeal.

From 1984 through 1991, Campanella owned a business known as U.S. Carbide Company (“Carbide-Campanella”). Carbide-Campanella operated its business in a 12,000 square foot building located on Brecksville Road in Independence, Ohio. The property was owned by Robert P. Campanella and Associates. Robert Campanella is Associates’ president and chairman.

In 1991, Carbide-Campanella sold substantially all of its assets to U.S. Carbide Manufacturing Company, Inc. (“Carbide-Dawson”), a company owned by Steve Dawson. Commerce provided Carbide-Dawson with purchase-money financing in the form of a $230,000 loan, eighty percent of which was guaranteed by the Small Business Administration. To secure the loan, Carbide-Dawson granted to Commerce a first-lien security interest in substantially all of its assets, including its equipment.

Carbide-Campanella provided Carbide-Dawson with additional purchase-money financing by accepting a subordinated promissory note in the face amount of $80,000 (“Subordinated Note”). To secure the subordinated note, Carbide-Dawson also granted to Carbide-Campanella a security interest in substantially all of its assets, which was subordinate to Commerce’s prior security interest. Financing statements were duly recorded with the Secretary of State showing Commerce’s superior lien.

*801 In connection with the purchase of the business, Carbide-Dawson, as tenant, and Associates, as landlord, entered into a written lease for the Brecksville Road property. Associates and Carbide-Dawson subsequently amended the lease by converting it from a fixed term to a month-to-month tenancy, with monthly rent of $4,000 payable on the first day of each calendar month.

On or about October 11, 1993, Carbide-Dawson informed Campanella that it had moved its business from the leased property. On October 22,1993, Carbide-Dawson sent a letter to Associates attempting to terminate the lease effective October 15, 1993 and paid rent through September 30, 1993.

On October 20, 1993, Campanella met Dawson at the property and discovered that Carbide-Dawson had “trashed” the premises. Garbage was strewn throughout the building and five windows and two window frames were broken. Carbide-Dawson left behind some scrap-materials, office furniture and seventeen machine tools, the equipment collateralizing the SBA loan. Campanella demanded that Carbide-Dawson clean the premises and fix the broken windows, but this was not accomplished.

Later that day, Campanella telephoned C. Robert Green, an officer of Commerce, and informed him that Campanella intended to sell the equipment on the premises. Green reminded Campanella that Commerce’s security interest in the equipment was prior to Campanella’s security interest. Campanella claims that he told Green that if Commerce owned the equipment, then Commerce would have to rent the premises on which the equipment was situated. According to Campanella, Green told him that Commerce would not pay any rent to Associates, but would move the equipment as soon as possible. Green does not remember discussing rent with Campanella during their telephone conversation on October 20.

On October 28,1993, Campanella met Green and Deborah Callen of the SBA at the premises. At this meeting, Campanella helped Green and Callen locate serial numbers and otherwise identify the equipment. Carbide-Campanella also had a security interest in the identical equipment, but subordinate to Commerce.

Campanella claims that Green asked him to secure the premises during their October 28 meeting, which Green denies. Green claims that Campanella asked “[s]hould I fix the windows and secure the property?” Green responded that fixing the windows sounded like a good idea. In any event, Campanella admits that Associates would have fixed the broken windows regardless of whether or not Green asked him to do so and regardless of whether or not the equipment remained upon the premises.

Campanella admits that Green never agreed to pay Campanella or his company rent in any amount. Campanella admits that he had no understanding or *802 agreement with Green concerning the payment of rent. Commerce and Associates never entered into any written lease or other agreement concerning the payment of rent or storage fees.

Associates never tendered possession of the premises to Commerce. Associates retained the keys to the premises and never gave Commerce independent access to the premises. Neither Green nor anyone else from Commerce returned to the premises after the October 28, 1993 meeting. Associates never billed Commerce for rent at any time while the equipment remained on the premises. Commerce never paid any rent and Associates never notified Commerce that it was delinquent in failing to pay rent.

At the October 28 meeting, Campanella “volunteered” to help Commerce sell the equipment. Campanella admits that Commerce never engaged him to assist in selling the equipment. However, Campanella claims that sometime in December 1993 or January 1994, Ms. Callen of the SBA told him to start keeping track of his time spent helping in finding a buyer so that he could be compensated. Callen denies asking Campanella to keep track of his time, but admits indicating to Campanella that she thought some type of compensation might be in order. Callen and Campanella agree that Callen never committed to paying any specific amount to Campanella. Bob Green of Commerce admitted that at the October 28 meeting he indicated to Campanella that he would be compensated for his assistance in procuring a buyer.

On November 3, 1993, only a few days after Green met Campanella at the premises, Carbide-Dawson filed a petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Ohio. Associates and Commerce both made filings therein to protect their interest as secured creditors.

On November 29, 1993, Associates filed a proof of claim with the Bankruptcy Court asserting a claim for $30,330 due from Carbide-Dawson for rent and repairs to the premises. Specifically, Associates claimed to be owed $12,000 for rent accruing since October 1, 1993. Associates also claimed to be owed several hundred dollars for fixing broken windows and lighting expenses at the premises.

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Bluebook (online)
745 N.E.2d 1087, 139 Ohio App. 3d 796, Counsel Stack Legal Research, https://law.counselstack.com/opinion/campanella-v-commerce-exchange-bank-ohioctapp-2000.