Columbia Dev. Corp. v. Krohn

2014 Ohio 5607
Ohio Court of Appeals·Decided December 19, 2014·No. C-130842·Published·Cited by 9 cases

Opinion

ENTERED

IN THE COURT OF APPEALS FIRST DEC 19 2014

APPELLATE DISTRICT OF OHIO

HAMILTON COUNTY

COLUMBIA DEVELOPMENT

CORPORATION, CASE NO. C1300842

Plaintiff-Appellee, OPINION

- vs-

MARC KROHN, RECEIVER, et al., Defendants-Appellants.

CIVIL APPEAL FROM HAMILTON COUNTY COURT OF COMMON PLEAS .

Case No. A1201721

Frost Brown Todd, LLC, Douglas R. Dennis, James C. Frooman and Ali Razzaghi, 3300 Great American Tower, 301 East Fourth Street, Cincinnati, Ohio 45202, for plaintiff-appellee

Barrett & Weber, LPA, C. Francis Barrett, 500 Fourth & Walnut Centre, 105 East Fourth Street, Cincinnati, Ohio 45202, for plaintiff-appellee

Michael R. Schmidt and RobertS. Rubin, 250 East Fifth Street, Suite 2350, Cincinnati, Ohio 45202, for defendants-appellants

Miller Canfield Paddock & StonPLC, Paul E. Per \and Matthew C. Steele, 511 Walnut Street, Suite 1900, Cincinnati, Ohio 45202, for defend,nts-appellants

M. POWELL, J.

{1} Defendants-appellants, NNN 250 East Fifth Street, LLC and 34 related entities (NNN), by and through their Receiver, Marc A. Krohn, appeal a decision of the Hamilton

County Court of Common Pleas granting partial summary judgment in favor of plaintiff- appellee, Columbia Development Corporation (Columbia), on NNN's counterclaim for tortious interference with contract. For the reasons stated below, we affirm the decision of the trial court.

{2} Columbia is the title holder and ground landlord for the land on which the Chiquita Center (Building) is located. NNN is the current ground tenant. The landlord/tenant relationship between the parties is governed by a lease entered into by NNN's predecessor- in-interest and Columbia on April29, 1982 (Ground Lease). The Ground Lease provides that NNN may sublease its interest in the Building.and that NNN and subtenants may install signage on the Building subject to compliance with applicable regulations and laws.

{3} On May 27, 2005, NNN entered into a sublease agreement with Deloitte LLP (Deloitte), whereby Deloitte became a tenant occupying four floors of the Building (Deloitte Lease). The lease gave Deloitte exclusive signage rights. On December 2, 2011, the Deloitte Lease was amended by a letter (Letter Agreement). The Letter Agreement preserved Deloitte's signage rights in conjunction with Deloitte's agreement to permit a new Building tenant, The Nielsen Company (Nielsen), to erect a sign on the east fagade of the Building. Pursuant to the Letter Agreement, Deloitte was entitled to offsets in rent in the event that installation of a Nielsen sign on the Building would prevent installation of a sign on. the Building by Deloitte (Rent Credit Provision).

{4} In 2012, Nielsen began the process of erecting its sign on the Building. To erect the sign, Nielsen and NNN sought a Notwithstanding Ordinance for a variance from the Cincinnati Zoning Code 1411-39(f), which provides that only the "principal occupant" of a building, as determined by the building owner, may display a sign. NNN, acting as owner of the Building, determined that Nielsen was not the "principal occupant." Therefore, a Notwithstanding Ordinance was sought so that Nielsen would be able to erect its sign.

Nielsen was granted a Notwithstanding Ordinance and erected a sign on the east fa<;:ade of the Building in March 2012.

{'if 5} In response to Nielsen's erection of the sign, Columbia filed a lawsuit against NNN and the City of Cincinnati seeking a temporary restraining order, preliminary injunction, and permanent injunction to enjoin the display of Nielsen's sign on the Building (Nielsen Injunction Motion). Deloitte was not a party to this lawsuit.

{'if 6} NNN and Columbia engaged in discovery regarding the Nielsen Injunction Motion. During discovery, Columbia subpoenaed Deloitte for information related to Deloitte's signage rights on the Building. On April5, 2012, Mr. Ronald Joseph, president of Columbia, was deposed. During the deposition, Mr. Joseph stated that he objects to "anyone putting signage on .the building" because in his opinion "it degrades the value of the building * * * it degrades the building from the neighborhood that we occupy throughout the area." After the· deposition was completed, Deloitte provided a copy of the Deloitte Lease and a copy of the Letter Agreement, with the Rent Credit Provision redacted.

{'if 7} On May 3, 2012, Columbia's counsel sent a letter to NNN's counsel which reiterated Columbia's objection to the Nielsen sign. The letter stated that Columbia objected to any signage installed by other tenants and intended to "vigorously litigate" this issue. Columbia copied the letter to Deloitte's counsel. Due to this letter, Deloitte delayed the planned installation of its sign on the Building.

{'if8} On May 17, 2012, NNN filed a counterclaim against Columbia alleging that Columbia had tortiously interfered with the Letter Agreement between NNN and Deloitte regarding Deloitte's signage rights at the Building. Attached to the counterclaim was an un-· redacted copy of the Letter Agreement disclosing the Rent Credit Provision to Columbia.

{'if 9} On June 18, 2012, the trial court denied the Nielsen Injunction Motion. The court reasoned that Nielsen was permitted to erect the sign because Nielsen and NNN sought a Notwithstanding Ordinance for a variance from Section 1411-39(f) of the Zoning

Code. In so holding, the court noted that while the issue of whether Columbia or NNN owns .

the Building is "hotly contested," ownership is not determinative because the Ground Lease

authorized NNN to seek a Notwithstanding Ordinance in the name of Columbia. Therefore, Columbia did not have standing to contest this action because it had "bargained away any rights with respect to signage issues in exchange for significant ground rent."

{10} NNN joined Deloitte as a party to the action on June 21, 2012. On June 29, 2012, Deloitte notified Columbia of its intention to install its sign the following week. On July 2, 2012, Columbia sent a letter to the City of Cincinnati referencing Section 1411-39(f) of the Zoning Code which discusses signage rights of a building's principal occupant and declaring itself the owner of the Building, the "principal occupant" ofthe Building, and revoking all prior designations of "principal occupant."

{11} On July 3, 2012, Columbia filed a motion for a temporary restraining order and a preliminary injunction to prevent the erection of the Deloitte sign (Deloitte Injunction Motion). Columbia's motion for a temporary restraining order was granted on July 9, 2012. However, the trial court ultimately denied the Deloitte Injunction Motion on December 10, 2012.

{12} In denying the Deloitte Injunction Motion, the court addressed the issue of ownership of the Building and determined that for purposes of Section 1411-39(f), Columbia was not the owner of the Building. Therefore, Columbia's action in declaring itself owner of the Building and the "principal occupant" under Section 1411-39(f) was not valid. Instead, NNN, as owner of the Building, could determine Deloitte is the "principal occupant" and permit it to erect its sign.

{13} Thereafter, Columbia moved for partial summary judgment on NNN's tortious interference with contract claim. NNN opposed Columbia's summary judgment motion. On

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