Harder Invests., L.L.C. v. Perin-Tyler Family Found., L.L.C.
This text of 2025 Ohio 4706 (Harder Invests., L.L.C. v. Perin-Tyler Family Found., L.L.C.) 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.
Opinion
[Cite as Harder Invests., L.L.C. v. Perin-Tyler Family Found., L.L.C., 2025-Ohio-4706.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
CLERMONT COUNTY
HARDER INVESTMENTS, LLC, : CASE NOS. CA2024-06-044 Appellee and Cross-Appellant, : CA2024-06-047
: - vs - OPINION AND : JUDGMENT ENTRY 10/14/2025 PERIN-TYLER FAMILY FOUNDATION, : LLC, : Appellant and Cross-Appellee.
CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS Case No. 2017 CVH 634
Rebold Larkin Murray LLC, and Kyle D. Murray, for appellee and cross-appellant.
Nichols, Speidel & Nichols, and Donald W. White, for appellant and cross-appellee.
____________ OPINION
BYRNE, P.J.
{¶ 1} Plaintiff, Harder Investments, Inc. ("Harder"), and Defendant, Perin-Tyler
Family Foundation ("Perin"), both appeal decisions of the Clermont County Court of Clermont CA2024-06-044 CA2024-06-047
Common Pleas, General Division, on their claims and counterclaims against each other
stemming from a commercial lease dispute. For the reasons discussed below, we affirm
the trial court's decision in part, reverse in part, and remand for further proceedings.
I. Factual and Procedural Background
{¶ 2} Perin owns Amelia Point, a commercial center in Pierce Township,
Clermont County, Ohio. The Amelia Point commercial center contains four development
parcels. One of the parcels contains a movie theater, and the other three parcels contain
retail space that Perin leased to various tenants. One of those three retail-space parcels
was "Lot Parcel 2," also known as the "Amelia Point Ruby Complex." The parcels contain
common access roadways and other amenities.
{¶ 3} In August 2013, Perin, as commercial landlord, entered into a ten-year lease
("Lease") with Harder, as commercial tenant, for restaurant space in a five-unit
commercial strip center contained within Lot Parcel 2. Harder operated a Dickey's
Barbecue Pit restaurant franchise in the leased premises. Over time, various disputes
arose between the parties with respect to the terms of the Lease.
A. Background on the Parties' Key Disputes
{¶ 4} The central dispute concerned the interpretation and implementation of
common area maintenance ("CAM") charges under Section 2.4 of the Lease. That section
provided:
2.4 CAM. Commencing on the Rent Commencement Date, Tenant shall pay in monthly installments, as Additional Rent, its proportionate share of Common Area Maintenance ("CAM") charges covering: (i) real estate taxes, including assessments, all insurance costs, and all costs to maintain, repair, service, and replace the Common Areas; (ii) reasonable reserves for the costs of repairing, re-roofing, painting, and resurfacing the Common Areas; (iii) all costs to supervise, manage, and administer the Center which costs may include a property management fee in connection with
-2- Clermont CA2024-06-044 CA2024-06-047
same and shall in any event include a fee to Landlord to supervise and administer the Center in an amount equal to ten percent (10%) of the total costs of item (i) above; and (iv) exterior utilities, maintenance, including parking areas, landscaping, and snow removal. All such CAM charges shall be in the estimated amount of $3.91 per square foot of the Premises per year (subject to adjustment at the conclusion of the Calendar Year as provided below), payable with the Fixed Minimum Rent as provided for in Paragraph 2.3 herein. Tenant shall at all times be responsible for and shall pay all municipal, county, state and federal taxes assessed against Tenant's leasehold interest in the Premises or against any personal property of any kind owned, installed or used by Tenant. Tenant’s proportionate share of CAM charges shall be the ratio of the area of the Premises to the total rentable area of the Shopping Center. Landlord shall submit to Tenant by March 31 each year the actual CAM charges incurred for the Center during the prior Calendar Year, which shall be used to adjust the CAM charges to be paid by Tenant until the next adjustment. Any underpayment or overpayment of CAM for the prior Calendar Year shall be paid by or credited to Tenant with the next installment of Rent due.
{¶ 5} Section 2.4 required Harder to pay its proportionate share of various
expenses incurred by Perin, including, but not limited to, real estate taxes, insurance
costs, maintenance expenses, and management fees. These required payments were
called "Common Area Maintenance" ("CAM") charges. While CAM charges were
estimated at $3.91 per square foot annually, Section 2.4 allowed for adjustments based
on actual costs. Significantly, Section 2.4(iii) provided that CAM charges would include
"all costs to supervise, manage, and administer the Center which costs may include a
property management fee in connection with same and shall in any event include a fee
to Landlord to supervise and administer the Center in an amount equal to ten percent
(10%) of the total costs of item (i) above."
{¶ 6} Problems arose in early 2014 when Harder began receiving CAM
statements from Perin that it believed were incorrect. Perin presented four different CAM
statements in 2014 that contained substantial errors. The initially requested CAM charges
-3- Clermont CA2024-06-044 CA2024-06-047
ranged widely from $4.72 to $7.02 per square foot, exceeding the lease's $3.91 estimate.
This was apparently due in part to what was later revealed to be the declining mental
capacity of Joseph Perin, Sr., who was then preparing the statements. After Harder
questioned the accuracy of these statements, Perin's management was transferred to
Joseph Sr.'s daughter, Patricia Perin Donovan. A key point of contention was Perin's
inclusion of an $11,700 annual property-management fee, which Perin charged
proportionally to all tenants. This fee was separate from and in addition to the 10%
supervision-and-administration fee explicitly mentioned in Section 2.4(iii). According to
trial testimony, this $11,700 amount was set arbitrarily by Joseph Perin, Sr., though expert
witnesses testified it aligned with market rates for third-party management services in the
region.
{¶ 7} Another significant dispute arose concerning real estate taxes. The
premises leased by Harder was located within "Lot Parcel 2," which contained both a
developed portion and an undeveloped portion. As an element of CAM charges, Perin
charged Harder for its proportionate share of real estate taxes on the entirety of Lot Parcel
2, while Harder maintained it should only pay taxes for its proportionate share of real
estate taxes for the developed portion containing its premises.
B. Harder's Claims and Perin's Counterclaims
{¶ 8} In May 2017, Harder filed suit against Perin. In its complaint, Harder brought
two claims that are relevant to this appeal:1
1. Harder's Count Two also alleged that Perin violated the implied covenant of good faith and fair dealing by failing to provide actual CAM charges and refusing to consider any Lease assignment until Harder paid the unsubstantiated CAM charges. This portion of Harder's Count Two is not relevant to this appeal. -4- Clermont CA2024-06-044 CA2024-06-047
• Harder's Count One, seeking declaratory judgment regarding
what Harder argued was its right to review Perin's
documentation supporting CAM charges; and
• Harder's Count Two, seeking damages for Perin's breach of
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[Cite as Harder Invests., L.L.C. v. Perin-Tyler Family Found., L.L.C., 2025-Ohio-4706.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
CLERMONT COUNTY
HARDER INVESTMENTS, LLC, : CASE NOS. CA2024-06-044 Appellee and Cross-Appellant, : CA2024-06-047
: - vs - OPINION AND : JUDGMENT ENTRY 10/14/2025 PERIN-TYLER FAMILY FOUNDATION, : LLC, : Appellant and Cross-Appellee.
CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS Case No. 2017 CVH 634
Rebold Larkin Murray LLC, and Kyle D. Murray, for appellee and cross-appellant.
Nichols, Speidel & Nichols, and Donald W. White, for appellant and cross-appellee.
____________ OPINION
BYRNE, P.J.
{¶ 1} Plaintiff, Harder Investments, Inc. ("Harder"), and Defendant, Perin-Tyler
Family Foundation ("Perin"), both appeal decisions of the Clermont County Court of Clermont CA2024-06-044 CA2024-06-047
Common Pleas, General Division, on their claims and counterclaims against each other
stemming from a commercial lease dispute. For the reasons discussed below, we affirm
the trial court's decision in part, reverse in part, and remand for further proceedings.
I. Factual and Procedural Background
{¶ 2} Perin owns Amelia Point, a commercial center in Pierce Township,
Clermont County, Ohio. The Amelia Point commercial center contains four development
parcels. One of the parcels contains a movie theater, and the other three parcels contain
retail space that Perin leased to various tenants. One of those three retail-space parcels
was "Lot Parcel 2," also known as the "Amelia Point Ruby Complex." The parcels contain
common access roadways and other amenities.
{¶ 3} In August 2013, Perin, as commercial landlord, entered into a ten-year lease
("Lease") with Harder, as commercial tenant, for restaurant space in a five-unit
commercial strip center contained within Lot Parcel 2. Harder operated a Dickey's
Barbecue Pit restaurant franchise in the leased premises. Over time, various disputes
arose between the parties with respect to the terms of the Lease.
A. Background on the Parties' Key Disputes
{¶ 4} The central dispute concerned the interpretation and implementation of
common area maintenance ("CAM") charges under Section 2.4 of the Lease. That section
provided:
2.4 CAM. Commencing on the Rent Commencement Date, Tenant shall pay in monthly installments, as Additional Rent, its proportionate share of Common Area Maintenance ("CAM") charges covering: (i) real estate taxes, including assessments, all insurance costs, and all costs to maintain, repair, service, and replace the Common Areas; (ii) reasonable reserves for the costs of repairing, re-roofing, painting, and resurfacing the Common Areas; (iii) all costs to supervise, manage, and administer the Center which costs may include a property management fee in connection with
-2- Clermont CA2024-06-044 CA2024-06-047
same and shall in any event include a fee to Landlord to supervise and administer the Center in an amount equal to ten percent (10%) of the total costs of item (i) above; and (iv) exterior utilities, maintenance, including parking areas, landscaping, and snow removal. All such CAM charges shall be in the estimated amount of $3.91 per square foot of the Premises per year (subject to adjustment at the conclusion of the Calendar Year as provided below), payable with the Fixed Minimum Rent as provided for in Paragraph 2.3 herein. Tenant shall at all times be responsible for and shall pay all municipal, county, state and federal taxes assessed against Tenant's leasehold interest in the Premises or against any personal property of any kind owned, installed or used by Tenant. Tenant’s proportionate share of CAM charges shall be the ratio of the area of the Premises to the total rentable area of the Shopping Center. Landlord shall submit to Tenant by March 31 each year the actual CAM charges incurred for the Center during the prior Calendar Year, which shall be used to adjust the CAM charges to be paid by Tenant until the next adjustment. Any underpayment or overpayment of CAM for the prior Calendar Year shall be paid by or credited to Tenant with the next installment of Rent due.
{¶ 5} Section 2.4 required Harder to pay its proportionate share of various
expenses incurred by Perin, including, but not limited to, real estate taxes, insurance
costs, maintenance expenses, and management fees. These required payments were
called "Common Area Maintenance" ("CAM") charges. While CAM charges were
estimated at $3.91 per square foot annually, Section 2.4 allowed for adjustments based
on actual costs. Significantly, Section 2.4(iii) provided that CAM charges would include
"all costs to supervise, manage, and administer the Center which costs may include a
property management fee in connection with same and shall in any event include a fee
to Landlord to supervise and administer the Center in an amount equal to ten percent
(10%) of the total costs of item (i) above."
{¶ 6} Problems arose in early 2014 when Harder began receiving CAM
statements from Perin that it believed were incorrect. Perin presented four different CAM
statements in 2014 that contained substantial errors. The initially requested CAM charges
-3- Clermont CA2024-06-044 CA2024-06-047
ranged widely from $4.72 to $7.02 per square foot, exceeding the lease's $3.91 estimate.
This was apparently due in part to what was later revealed to be the declining mental
capacity of Joseph Perin, Sr., who was then preparing the statements. After Harder
questioned the accuracy of these statements, Perin's management was transferred to
Joseph Sr.'s daughter, Patricia Perin Donovan. A key point of contention was Perin's
inclusion of an $11,700 annual property-management fee, which Perin charged
proportionally to all tenants. This fee was separate from and in addition to the 10%
supervision-and-administration fee explicitly mentioned in Section 2.4(iii). According to
trial testimony, this $11,700 amount was set arbitrarily by Joseph Perin, Sr., though expert
witnesses testified it aligned with market rates for third-party management services in the
region.
{¶ 7} Another significant dispute arose concerning real estate taxes. The
premises leased by Harder was located within "Lot Parcel 2," which contained both a
developed portion and an undeveloped portion. As an element of CAM charges, Perin
charged Harder for its proportionate share of real estate taxes on the entirety of Lot Parcel
2, while Harder maintained it should only pay taxes for its proportionate share of real
estate taxes for the developed portion containing its premises.
B. Harder's Claims and Perin's Counterclaims
{¶ 8} In May 2017, Harder filed suit against Perin. In its complaint, Harder brought
two claims that are relevant to this appeal:1
1. Harder's Count Two also alleged that Perin violated the implied covenant of good faith and fair dealing by failing to provide actual CAM charges and refusing to consider any Lease assignment until Harder paid the unsubstantiated CAM charges. This portion of Harder's Count Two is not relevant to this appeal. -4- Clermont CA2024-06-044 CA2024-06-047
• Harder's Count One, seeking declaratory judgment regarding
what Harder argued was its right to review Perin's
documentation supporting CAM charges; and
• Harder's Count Two, seeking damages for Perin's breach of
contract based on Perin's improper inclusion in CAM charges
of (1) both the discretionary property-management fee and
the 10% supervision-and-administration fee, rather than only
one of those, and (2) incorrectly calculated real estate taxes.
{¶ 9} Perin counterclaimed against Harder. In its counterclaim complaint, Perin
brought two claims that are relevant to this appeal:2
• Perin's Counterclaim One, seeking damages for Harder's
breach of contract based on underpayment of rent when it
refused to pay the disputed CAM charges; and
• Perin's Counterclaim Three, seeking declaratory judgment
construing provisions of the Lease relating to CAM charges.3
C. Summary Judgment
{¶ 10} A little less than a year later, Harder moved for summary judgment on all
claims and counterclaims. The trial court denied Harder summary judgment on Harder's
Count One regarding CAM documentation, but sua sponte granted summary judgment
for Perin on that claim—without Perin having moved for summary judgment. The court
concluded that there was no express provision in the Lease that required Perin to give
2. Perin voluntarily dismissed its Counterclaim Two, alleging malicious false claims and fraudulent misrepresentation.
3. Perin's Counterclaim Three also sought declaratory judgment construing provisions regarding Lease assignment and seating capacity. Those matters are not relevant to this appeal. -5- Clermont CA2024-06-044 CA2024-06-047
Harder underlying documentation supporting CAM charges. The Lease instead required
Perin to give Harder only a CAM reconciliation statement containing a breakdown of all
charges such that Harder could determine what the total charges were.
{¶ 11} Next, while the trial court denied Harder summary judgment with respect to
the breach-of-contract claims in Harder's Count Two and the breach-of-contract
counterclaims in Perin's Counterclaim One, the court resolved an interpretive dispute
under the Lease. The court concluded, as a matter of law, that Section 2.4 of the Lease
permitted Perin to charge Harder both a proportional annual property-management fee
and the 10% supervision-and-administration fee.
D. Trial, Post-Trial Decisions, and Objections
{¶ 12} After a lengthy discovery period, the court's magistrate presided over a
three-day bench trial in June 2021 on all remaining claims and issues. The magistrate
issued his post-trial decision on October 25, 2021. Perin's systematic failures to provide
accurate CAM statements, noted the magistrate, created an environment of uncertainty
and distrust that directly contributed to Harder's decision to withhold payment. The
magistrate found in favor of Harder on two issues relevant to this appeal. First, the
magistrate found that Perin improperly included the property-management fee and the
10% supervision-and-administration fee in Harder's CAM charges, contrary to the trial
court's earlier summary-judgment determination that the Lease permitted both fees.
Second, the magistrate found that Perin improperly calculated the real estate taxes
portion of Harder's CAM charges. The magistrate reached this conclusion based on the
understanding that the "Ruby Complex" where Harder leased the premises was only the
developed portion of Lot Parcel 2, and did not include the undeveloped portion known as
the Emerald Complex. In total, the magistrate found that Perin had overcharged Harder
-6- Clermont CA2024-06-044 CA2024-06-047
in the amount of $10,133.60. But the magistrate also ruled for Perin, finding that Harder
had underpaid administrative fees in the amount of $188.37. This resulted in a net
recovery for Harder in the amount of $9,945.23.
{¶ 13} Objections were filed, and the common pleas court remanded the matter to
the magistrate. On remand, the magistrate in an October 18, 2022 decision recalculated
damages in light of the trial court's previous summary-judgment determination that the
Lease permitted Perin to charge both the discretionary property-management fee and the
automatic 10% supervision-and-administration fee. The magistrate concluded that the
discretionary property-management fee amount of $11,700 was "cost based and not
arbitrary." The magistrate then determined that Harder owed Perin $3,297.96 in unpaid
CAM charges, but ultimately concluded that "because of mutual breaches of the Lease,
neither party should recover on contract claims against the other." The magistrate
explained that Harder breached the Lease by not paying its share of the $11,700
discretionary property-management fee over the course of several years, and Perin
breached the Lease by charging Harder for real estate taxes covering both the Ruby and
Emerald Complexes, rather than just the Ruby Complex.
{¶ 14} The magistrate also addressed Perin's claim for interest, late fees, and a
penalty of $281,000. The magistrate noted that this amount was 85 times the $3,297.96
that Harder owed to Perin, and determined this "imbalance" to be "grossly
disproportionate." The magistrate declined to order Harder to pay Perin any interest, late
fees, or penalty.
{¶ 15} Both parties objected to the magistrate's October 18, 2022 decision. In a
decision and entry issued on February 21, 2023, the common pleas court overruled both
parties' objections. The court upheld the magistrate's numerical calculations, but found
-7- Clermont CA2024-06-044 CA2024-06-047
that "to the extent that the Magistrate determined that neither party was entitled to
recovery because of mutual breaches of the lease, the Court hereby modifies that
finding." The court then determined that Harder owed damages of $3,297.96 to Perin.
{¶ 16} The court also agreed with the magistrate's decision not to award late fees,
interest, or penalties, noting that the requested $281,000 amount was "unconscionable."
The court noted that both parties had breached the Lease and that Harder's breach
partially resulted from Perin's breach.
{¶ 17} Both parties subsequently moved for attorney's fees under the Lease's fee-
shifting provision. On May 17, 2024, the trial court found that both parties were "prevailing
parties" under the fee-shifting provision, effectively denying fees to both sides.
{¶ 18} Harder and Perin both appealed.
II. Analysis
{¶ 19} The parties' cross-appeals challenge the trial court's interpretation of the
Lease and its determination of damages. At issue are five key determinations made by
the trial court:
(1) Harder challenges the summary-judgment determination
that the Lease permitted Perin to charge a discretionary
property-management fee in addition to the automatic
10% supervision-and-administration fee and the later,
post-trial finding that Perin properly charged an $11,700
discretionary property-management fee;
(2) Harder challenges the summary-judgment determination
that Perin was not required by the Lease to provide Harder
with documentation of all CAM charges;
-8- Clermont CA2024-06-044 CA2024-06-047
(3) Perin challenges the post-trial allocation of real-estate-tax
liability;
(4) Perin challenges the post-trial denial of penalties and
interest; and
(5) Both parties challenge the post-trial conclusion that each
party is a prevailing party, which precluded any award of
attorney fees under the Lease's fee-shifting provision.
All these challenges involve the interpretation and construction of the terms of the Lease.
A. Contract Interpretation and Construction
{¶ 20} Our analysis begins with the foundational principles of contract
interpretation. The interpretation of contractual terms presents a question of law that we
review de novo. Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio St.3d 107,
108, 1995-Ohio-214.
{¶ 21} "The role of courts in examining contracts is to ascertain the intent of the
parties." St. Marys v. Auglaize Cty. Bd. of Commrs., 2007-Ohio-5026, ¶ 18, citing
Hamilton Ins. Servs., Inc. v. Nationwide Ins. Companies, 86 Ohio St.3d 270, 1999-Ohio-
16. That intent manifests through the contract's language itself. Shifrin v. Forest City
Ents., Inc., 64 Ohio St.3d 635, 638, 1992-Ohio-28. This focus on the text requires an
examination of the agreement holistically, interpreting each provision not in isolation but
as part of an integrated whole. Foster Wheeler Enviresponse, Inc. v. Franklin Cty.
Convention Facilities Auth., 78 Ohio St.3d 353, 361, 1997-Ohio-202.
{¶ 22} Where the contractual language speaks with clarity, a court's role is
straightforward: apply the contract's terms as written and refrain from supplementing the
agreement with other terms or requirements. See Aultman Hosp. Assn. v. Community
-9- Clermont CA2024-06-044 CA2024-06-047
Mut. Ins. Co., 46 Ohio St.3d 51, 53 (1989). But when the text is reasonably susceptible
to multiple interpretations—that is, when genuine ambiguity exists—the inquiry
necessarily broadens. In such cases, the court may consider extrinsic evidence to
illuminate the parties' intent, including the circumstances surrounding the agreement's
formation and the parties' subsequent course of performance. Graham v. Drydock Coal
Co., 76 Ohio St.3d 311, 313-314, 1996-Ohio-393.
B. The Property-Management Fee
{¶ 23} Harder's first assignment of error states:
THE TRIAL COURT ERRED IN DETERMINING THAT THE LEASE ALLOWED PERIN TO COLLECT A SEPARATE, ARBITRARY SELF-MANAGEMENT FEE, ABOVE AND BEYOND THE 10% OF COSTS PROVIDED IN THE LEASE, WHEN PERIN INCURRED NO ACTUAL COST FOR MANAGEMENT.
{¶ 24} As previously described, Section 2.4 of the lease governs CAM charges.
On summary judgment, the trial court determined that Section 2.4(iii) allows for two fees:
(1) a discretionary property-management fee, and (2) an automatic 10% supervision-and-
administration fee. Later, with regard to the discretionary property-management fee, the
court adopted the magistrate's finding that Perin was entitled to charge such a fee in the
amount of $11,700, even though no contemporaneous documentation supported the
specific components of this fee. Harder's first assignment of error challenges both
determinations. We will address these arguments in turn.
1. May Perin Charge Both Fees?
{¶ 25} Section 2.4 states that Harder must pay a proportionate share of CAM
charges, which include multiple components. Section 2.4(iii) describes one of those
components as "all costs to supervise, manage, and administer the Center." It further
breaks "all costs" into two sub-components. First, Section 2.4(iii) states that these costs
- 10 - Clermont CA2024-06-044 CA2024-06-047
"may include a property management fee in connection with same." (Emphasis added.).
"[A]nd," Section 2.4(iii) states, these costs "shall in any event include a fee to Landlord to
supervise and administer the Center in an amount equal to ten percent (10%) of the total
costs of item (i) above." (Emphasis added.). The reference to the "total costs of item (i)
above" is a reference to "real estate taxes, including assessments, all insurance costs,
and all costs to maintain, repair, service, and replace the Common Areas." The provision's
structure—particularly its use of "and" to separate these clauses and its contrasting
language of "may" versus "shall"—makes clear that both fees are authorized and
suggests these fees serve different purposes. The automatic 10% supervision-and-
administration fee is explicitly tied to the landlord's supervisory role and is calculated
based on item (i) costs. The phrase "shall in any event" creates a floor, guaranteeing the
10% fee regardless of Perin's actual property-management expenditures.
{¶ 26} Harder advances a narrow reading of Section 2.4(iii), contending that Perin
may charge the discretionary property-management fee only when incurring out-of-
pocket property-management expenses owed to third parties, not when performing these
services in-house. We disagree with this restrictive interpretation. It has no support in the
text of Section 2.4(iii). Section 2.4(iii) refers to "all costs to supervise, manage, and
administer the Center," and states that these costs "may include a property management
fee in connection with same," but does not distinguish between costs payable to third
parties and in-house costs. (Emphasis added.). When interpreting a contract, we may not
insert words not found in the text. LublinSussman Group LLP v. Lee, 2018-Ohio-666, ¶
19 (6th Dist.) (stating that "the court must give effect to the words used in the contract,
and not delete or insert words"), citing Cleveland Elec. Illum. Co. v. Cleveland, 37 Ohio
St.3d 50, 53 (1988). Having reached this conclusion based on the unambiguous language
- 11 - Clermont CA2024-06-044 CA2024-06-047
of Section 2.4(iii), no further analysis of the terms of the Lease is necessary with respect
to whether the discretionary property-management fee may include costs associated with
services provided in-house. See Sunoco, Inc. (R & M) v. Toledo Edison Co., 2011-Ohio-
2720, ¶ 37 ("When the language of a written contract is clear, a court may look no further
than the writing itself to find the intent of the parties.").
{¶ 27} But Harder also raises a broader argument about potential double recovery
that merits serious consideration. The functions described in the discretionary property-
management-fee and the automatic 10% supervision-and-administration-fee provisions
substantially overlap: the discretionary property-management fee encompasses
supervision, administration, and management, while the automatic 10% fee covers
supervision and administration. Thus both fees address supervision and administration.
This overlap, combined with the absence of any requirement to document actual
management costs, creates a troubling possibility: Perin could potentially charge and
receive compensation for both the automatic 10% supervision-and-administration fee and
additional compensation for property-management services (per the discretionary
property-management fee) that encompass essentially identical responsibilities. Such an
arrangement could effectively compensate Perin twice for the same managerial functions.
{¶ 28} Harder's argument, then, concerns a fundamental question: Did the parties
intend to create a framework that could result in this kind of double recovery? The answer
requires a careful examination of the relationship between these two fee provisions and
their place within the broader economic structure of the Lease.
{¶ 29} The double-recovery analysis requires a nuanced understanding of
economic costs. As the magistrate aptly recognized, economic cost comprises two
distinct components: explicit costs and implicit costs. In re Perry Cty. Foods, Inc., 313
- 12 - Clermont CA2024-06-044 CA2024-06-047
B.R. 875, 901 (Bankr.N.D.Ala. 2004). Explicit costs, the more familiar category, arise from
direct monetary payments. Iowa Util. Bd. v. Fed. Communications Comm., 219 F.3d 744,
752, fn. 5 (8th Cir. 2000) ("Explicit costs are those costs incurred when a monetary
payment is made."), vacated in part on other grounds, 301 F.3d 957 (8th Cir. 2002). These
include readily quantifiable expenses like raw materials, labor, and other operating costs.
In re Perry Cty. Foods at 901. Implicit costs, by contrast, represent the value of resources
deployed without immediate monetary exchange. Iowa Util. Bd. at 752, fn. 6, citing Roger
A. Arnold, Economics, at 484-485 (2d Ed. 1992). These opportunity costs emerge when
a business directs internal resources toward specific activities, thereby foregoing
alternative uses of those resources. In re Perry Cty. Foods at 901 (noting that normal
profit calculations include "implicit costs such as the value of the time devoted to the
business by its owners"). While implicit costs lack the tangible paper trail of their explicit
counterparts, they represent equally real economic burdens.
{¶ 30} The evidence in this case shows that Perin's property-management
activities generated both explicit and implicit costs (though what the evidence shows on
this matter is not strictly necessary for our analysis of the Lease terms). Even without
third-party management expenses, Perin incurred substantial implicit costs: allocation of
internal staff time, overhead associated with property-management functions,
administrative expenses for tenant relations and maintenance coordination, supervision
of contractors, and maintenance of management systems. These resource commitments,
though not reflected in direct monetary outlays, represented genuine economic costs that
Perin could have otherwise directed toward alternative profitable ventures.
{¶ 31} Viewed through this economic lens, the Lease's fee structure, allowing both
an automatic 10% fee and a discretionary property-management fee, may well
- 13 - Clermont CA2024-06-044 CA2024-06-047
compensate different aspects of Perin's total property-management burden. When Perin
opts for in-house management over third-party services, it assumes real economic costs
through the commitment of resources that could otherwise be deployed elsewhere. The
absence of explicit costs does not diminish the reality or recoverability of these economic
burdens under the Lease.
{¶ 32} Harder advances yet another argument focused on the purportedly arbitrary
nature of the discretionary property-management fee. This challenge rests on Section
2.4's requirement that Perin "submit to Tenant by March 31 each year the actual CAM
charges incurred for the Center during the prior Calendar Year." (Emphasis added.). The
$11,700 discretionary property-management fee, Harder contends, lacked documentary
support or cost-based calculation, appearing instead to represent an arbitrary figure
determined by Joseph Perin, Sr. Invoking traditional principles of contract interpretation,
Harder argues that our interpretation must give effect to all contractual provisions rather
than render them meaningless. In Harder's view, permitting Perin to assess fees without
demonstrating actual costs would effectively nullify the above-quoted requirement.
{¶ 33} We find this argument unconvincing. Our interpretation harmonizes all
provisions of Section 2.4(iii) while acknowledging the economic realities of property
management. The Lease's requirement for Perin to annually submit "actual CAM charges
incurred" to Harder did not necessarily demand line-item accounting of internal expenses.
Rather, it required that the charges reflect genuine economic costs, both explicit and
implicit, associated with property management. When Perin provided management
services internally at market rates, particularly when those rates were demonstrably
reasonable, such charges satisfy the Lease's requirement. This reading gives practical
effect to all contractual provisions while avoiding an overly restrictive interpretation that
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would unfairly disadvantage Perin, which chose to manage its property directly, rather
than through a third-party management service.
{¶ 34} We find no error in the trial court's determination that the Lease permitted
Perin to charge both the discretionary property-management fee and the automatic 10%
supervisions-and-administration fee.
2. Was the $11,700 Fee Permissible?
{¶ 35} As mentioned above, Harder also challenges the reasonableness of the
$11,700 discretionary property-management fee charged by Perin. Upon our review of
the record, we find that the record before us amply supports both the reasonableness of
the $11,700 fee and the substantiality of the services rendered. The magistrate's detailed
findings paint a picture of hands-on management by Perin family members,
encompassing a broad spectrum of essential services: bill payment, contractor oversight,
repair execution, rent collection, and various administrative responsibilities. Expert
testimony confirmed that the $11,700 fee aligned with prevailing market rates for
comparable third-party management services. Perhaps most tellingly, Harder's own
witness conceded that outsourcing these functions could command fees up to $25,000—
more than twice the amount Perin charged.
{¶ 36} We conclude that the trial court properly permitted Perin to assess the
$11,700 discretionary property-management fee in addition to the automatic 10%
supervision-and-administration fee.
{¶ 37} We overrule Harder's first assignment of error.
C. Documentation Supporting CAM Charges
{¶ 38} Harder's second assignment of error states:
THE TRIAL COURT ERRED IN FINDING THAT HARDER IS NOT ENTITLED TO UNDERLYING DOCUMENTATION FOR
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CAM CALCULATIONS AT SUMMARY JUDGMENT.
{¶ 39} The trial court granted summary judgment to Perin on Harder's Count One,
which sought declaratory relief regarding CAM-charges documentation. In its second
assignment of error, Harder challenges the trial court's grant of summary judgment to
Perin on this claim. Harder rests its challenge on two grounds.
{¶ 40} First, Harder contends that the trial court improperly awarded summary
judgment to Perin sua sponte, without the predicate of a formal motion from Perin seeking
such relief. Second, and more fundamentally, Harder argues that genuine issues of
material fact precluded summary judgment in Perin's favor on the merits.
{¶ 41} The controversy centers on the following provision in Section 2.4 of the
Lease: "Landlord shall submit to Tenant by March 31 each year the actual CAM charges
incurred for the Center during the prior Calendar Year." According to Harder, this
contractual obligation demanded more than the mere CAM reconciliation statements that
Perin furnished; it also required production of underlying documentation substantiating
those CAM charges. The adequacy of notice—specifically, whether Perin's reconciliation
statements sufficiently informed Harder of the actual charges—lies at the core of this
dispute.
1. Sua Sponte Summary Judgment to Perin
{¶ 42} We begin with Harder's procedural challenge to the trial court's grant of
summary judgment in Perin's favor. While Ohio law generally constrains courts from
entering summary judgment for non-moving parties, this constraint is not absolute. The
Ohio Supreme Court has recognized that a court may grant summary judgment to a non-
movant when three essential conditions converge: "[1] all relevant evidence is before the
court, [2] no genuine issue as to any material fact exists, and [3] the non-moving party is
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entitled to judgment as a matter of law." (Cleaned up.) Todd Dev. Co. v. Morgan, 2008-
Ohio-87, ¶ 16. This authority comes with a procedural safeguard: the party facing adverse
judgment must have enjoyed a full and fair opportunity to be heard. Id. at ¶ 17.
{¶ 43} The record before us demonstrates that these requirements were satisfied.
The central question presented in both Harder's Claim One and Perin's Counterclaim
Three centered on contract interpretation, specifically, whether the Lease's requirement
that Perin provide "actual CAM charges" carries with it an implicit obligation to produce
supporting documentation. Far from being blindsided by this issue, Harder itself set the
issue squarely before the court through its own motion for summary judgment. The
relevant evidence (principally the Lease agreement) was fully before the court, and
Harder exercised its opportunity to advance its interpretation of the Lease's requirements
through comprehensive briefing and oral argument.
{¶ 44} Most significantly, the interpretation of "actual CAM charges" presented a
pure question of law amenable to resolution through established principles of contract
interpretation. The meaning of this phrase did not turn on disputed facts or competing
evidence; it required only the application of legal principles to uncontested contractual
language. In these circumstances, where the dispositive question was purely legal and
both parties had fully aired their positions, the trial court acted within its authority in
granting summary judgment to Perin. See id. at ¶ 16.
2. Obligation to Produce CAM-Charge Documentation
{¶ 45} Turning to the merits of Harder's declaratory-judgment claim, we conclude
that the trial court correctly determined that the Lease created no implicit obligation for
Perin to produce documentation supporting specific CAM charges. The text of the Lease
agreement is dispositive on this point.
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{¶ 46} Section 2.4 of the Lease established a straightforward reporting framework:
Perin "shall submit to Tenant by March 31 each year the actual CAM charges incurred for
the Center during the prior Calendar Year," which submission then served to "adjust the
CAM charges to be paid by Tenant until the next adjustment." While the Lease
meticulously defined both the scope of CAM charges (encompassing maintenance,
repairs, insurance, and taxes) and their calculation method based on the tenant's
proportionate share of rentable area, it notably omitted any requirement for supporting
documentation, receipts, or detailed breakdowns. As the trial court aptly observed, had
the parties intended to create such a documentation requirement, they could have readily
included it in the Lease's provisions.
{¶ 47} Harder's reliance on Upper Krust S., Inc. v. School Emps. Retirement Bd.
of Ohio, 1996 Ohio App. LEXIS 1176 (2d Dist. Mar. 29, 1996), is misplaced. That case,
while superficially similar, presented a fundamentally different problem. There, the new
management company of the School Employees Retirement Board of Ohio ("SERBO")
had restructured its accounting categories, making it impossible for Upper Krust, the
tenant, to identify which charges fell within the contractually specified categories of
parking lot expenses it was required to pay. Upper Krust at *5, 31. The court's narrow
remedy of requiring audited statements addressed this specific impairment of basic
contract performance. Id. at *32-33. It did not, as Harder suggests, establish a broader
principle requiring lessors to provide underlying documentation for CAM charges.
{¶ 48} Indeed, Upper Krust's holding was explicitly tethered to the practical
necessity of proper expense categorization. The court required SERBO to "provide Upper
Krust with a statement breaking down the charges for the five types of parking lot CAM
expenses that it is required to pay so that Upper Krust could comply with its contractual
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obligations." Id. at *33. This remedy stemmed from the court's authority to supply implied
terms "'indispensable to effectuate the intentions of the parties, without which the contract
itself could not be performed.'" Id., quoting Williams v. Goodyear Aircraft Corp., 84 Ohio
App. 113, 118 (9th Dist. 1948). Such is not the case here.
{¶ 49} Harder's argument that the phrase "actual CAM charges" is ambiguous fails
to persuade. The term "actual" carries its ordinary meaning: "[e]xisting in fact; real" as
distinguished from estimated or projected charges. Black's Law Dictionary (12th Ed.
2024). Nothing in this commonplace term suggests an implicit documentation
requirement, and we decline to read one into the Lease.
{¶ 50} Our interpretation does not leave tenants defenseless against potential
CAM overcharges. They retain their right to challenge whether specific charges were
incurred or properly apportioned, as Harder has done here. But the Lease's requirement
of "actual CAM charges" demands only that Perin provide an accurate accounting of
charges incurred, not that it produce a paper trail for each charged expense.
{¶ 51} Accordingly, we conclude that the trial court properly granted summary
judgment to Perin on the issue of CAM-charge documentation.
{¶ 52} We overrule Harder's second assignment of error.
D. Apportionment of Real Estate Taxes
{¶ 53} Perin's first assignment of error states:
THE MAGISTRATE'S AND TRIAL COURT'S DECISION TO REDUCE HARDER'S CAM RESPONSIBILITY BY DIVIDING THE PLATTED LOT/PARCEL WAS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE.
{¶ 54} This assignment of error concerns the magistrate's and trial judge's
analyses of whether Perin erred in calculating Harder's proportionate share of Perin's real
estate taxes under the Lease.
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{¶ 55} This assignment of error presents a question of contract interpretation:
whether the Lease permits allocating real estate taxes based on a division of Lot Parcel
2 into developed and undeveloped components, rather than treating the parcel as an
indivisible whole.
1. The Reasoning in the Trial Court
{¶ 56} As an element of CAM charges, Perin charged Harder for Harder's
proportionate share of the real estate taxes on 100% of Lot Parcel 2. The magistrate held
that Perin overcharged Harder and should have instead charged Harder for Harder's
proportionate share of Perin's real estate taxes on only the developed portion of Lot
Parcel 2 in which Harder's leased premises was located.4
{¶ 57} In analyzing the parties' arguments about real estate taxes, the magistrate
looked to the language of the Lease, but also discussed—and apparently considered—
testimony about how the county treasurer taxed the entirety of Lot Parcel 2, testimony
about how a landscaping company mowed the grass on all of Lot Parcel 2 in one service
call and issued one fee for the work until Perin asked it to split the fee, and testimony
about Perin's internal use of the term "Emerald Complex" to refer to the undeveloped
portion of Lot Parcel 2 and the term "Ruby Complex" to refer to the developed portion.
The magistrate also stated that "The absence of specific language in the lease stating
that 'taxes' means taxes on both parcels should be construed against the drafter of the
lease," which was Perin.
4. To be clear, the magistrate determined that the developed portion of Lot Parcel 2 was 49.39% of the total. Thus, the magistrate determined that Harder should pay its proportionate share of 49.39% of the Lot Parcel 2 real estate taxes; the magistrate did not determine that Harder should pay 49.39% of the total Lot Parcel 2 real estate taxes. In other words, the magistrate found that Harder was responsible for less than 49.39% of the Lot Parcel 2 real estate taxes. - 20 - Clermont CA2024-06-044 CA2024-06-047
{¶ 58} The trial judge, reviewing Perin's objections to the magistrate's decision,
found no error with respect to real estate taxes. The judge relied on the text of the Lease,
the "evidence in the record," and Daniel Harder's testimony about which portion of the
premises should have been considered for real estate tax calculation purposes.
2. Perin's Argument on Appeal
{¶ 59} On appeal, Perin challenges the court's decision to divide Lot Parcel 2 into
separately developed "Ruby Complex" and undeveloped "Emerald Complex" portions for
purposes of calculating real estate taxes as an element of CAM charges. Perin argues
this division was arbitrary and unsupported by evidence, contending that the Lease
contemplated CAM charges including Harder's proportionate share of real estate taxes
based on the entire, undivided Parcel 2 as described in the Lease's legal description and
consistently billed by the county treasurer. Perin maintains that no survey, legal
description, or credible evidence supported the trial court's decision to divide what has
always been treated as a single tax parcel, and that the court's erroneous division
substantially reduced Harder's legitimate CAM obligations in contravention of the Lease
terms.
3. Contractual Analysis of the Lease's Terms
{¶ 60} Perin's challenge presents a straightforward question of contract
interpretation: whether the Lease permits dividing Lot Parcel 2 into developed and
undeveloped portions when calculating the real estate tax portion of CAM charges. We
must therefore apply the fundamental principles of contract interpretation. The paramount
objective in contract interpretation is to effectuate the parties' intent, which we discern
from the plain and ordinary meaning of the contractual language unless the agreement
clearly signals a different meaning. Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp., 2014-
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Ohio-3095, ¶ 9. When confronted with clear contractual terms, our inquiry extends no
further than the document itself. Id. So our analysis here begins with the text of the Lease.
{¶ 61} Section 2.4 of the Lease establishes the framework for calculating CAM
charges. It requires Harder to pay "its proportionate share" of various expenses, including
"real estate taxes, including assessments," along with insurance costs, maintenance
expenses, and management fees. Section 2.4(i)-(iv). The provision defines "proportionate
share" as "the ratio of the area of the Premises to the total rentable area of the Shopping
Center."
{¶ 62} The definition of "proportionate share" incorporates two terms that the
Lease separately defines in the "DEFINITIONS" section: "Premises" and "Shopping
Center." Understanding these definitions is essential to resolving the parties' dispute.
{¶ 63} "Premises" refers specifically to Harder's leased space:
"Premises" shall mean that certain space approximately 2,450 square feet (subject to confirmation by measurement as provided below) situated in the Amelia Point Ruby Complex and commonly known as Unit 5, 1221 SR 125, Amelia, Ohio. The approximate location and boundaries of the Premises are shown in the attached Exhibit A.
{¶ 64} "Shopping Center" refers to the entire Amelia Point Ruby Complex:
"Shopping Center" shall mean the Amelia Point Ruby Complex, as depicted in the attached Exhibit A ("Ruby Complex"), which is real property in Pierce Township, Clermont County, Ohio, being more particularly described in the attached Exhibit A-1.
{¶ 65} Both definitions refer to Exhibit A, the site plan attached to the Lease:
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We note four key points about the site plan. First, it depicts a development with two
sections of roughly equal size. The western half is designated "FUTURE
DEVELOPMENT," while the eastern half shows five developed retail units. Second,
Harder's "premises," Unit 5, appears near the center of the site plan on the western edge
of the retail units, marked by diagonal lines and labeled "Dickey's BBQ." Third, the Lease's
definition of "Shopping Center" describes the entire area depicted in Exhibit A as the
"Amelia Point Ruby Complex." Nothing in the definition suggests any subdivision or
distinction between developed and undeveloped portions. Under the Lease, then,
everything shown in the site plan is part of the Amelia Point Ruby Complex.
{¶ 66} The definition of "Shopping Center," or "Amelia Point Ruby Complex,"
states that the property is "more particularly described" in Exhibit A-1, which provides a
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typewritten metes and bounds legal description of 2.114 acres.5 Exhibit A-1 refers to this
property both as the "Ruby Complex" and as "Lot Parcel 2," making these terms
synonymous with "Shopping Center" and "Amelia Point Ruby Complex." Exhibit A-1 is
reproduced below:
{¶ 67} The copy of Exhibit A-1 in the record contains handwritten notations stating
"EXHIBIT A-1," "LOT-PARCEL 2," and "RUBY and EMERALD COMPLEXES." Testimony
5. Exhibit A-1 actually states that Parcel 2 contains 1.984 acres, but the parties agree the actual size is 2.114 acres. This discrepancy is not relevant to the issues on appeal. - 24 - Clermont CA2024-06-044 CA2024-06-047
at trial established that within Perin's business operations, they informally used "Ruby
Complex" to refer to the developed portion and "Emerald Complex" to refer to the
undeveloped portion of Lot Parcel 2. But this internal nomenclature appears nowhere in
the typewritten text of the Lease. The Lease refers only to the entire Shopping Center or
Lot Parcel 2 as the "Amelia Point Ruby Complex."
{¶ 68} Nothing in the record suggests the handwritten notations existed on Exhibit
A-1 when the parties executed the Lease. Neither party could explain how or when the
handwriting appeared on the document. We therefore treat the handwritten additions as
subsequent, unauthorized modifications that cannot alter the Lease's meaning. This
conclusion follows from the terms of the Lease itself. Section 14.9 of the Lease states
that the Lease may be modified only "by an instrument in writing executed by the parties
hereto." Section 14.14 similarly requires that amendments be "executed by the parties."
Because the record contains no evidence that both parties executed any document
adding these handwritten words to the Lease, the notations form no part of the binding
agreement and must be ignored in our analysis. See Wells Fargo Bank, N.A. v. Baldwin,
2012-Ohio-3424, ¶ 18 (12th Dist.) ("A contract cannot be unilaterally modified, and parties
to a contract must mutually consent to a modification."), citing Hanna v. Groom, 2008-
Ohio-765, ¶ 27 (10th Dist.).
{¶ 69} Having identified the relevant definitions, we return to Section 2.4's formula:
Harder's "proportionate share" of CAM charges equals "the ratio of the area of the
Premises to the total rentable area of the Shopping Center." This formula contains one
additional phrase requiring interpretation: "total rentable area." The Lease does not define
this term. When a contract leaves a term undefined, we give the term its "ordinary
meaning unless manifest absurdity results, or unless some other meaning is clearly
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evidenced from the face or overall contents of the agreement." (Cleaned up.) Deerfield
Twp. v. Mason, 2013-Ohio-779, ¶ 16 (12th Dist.).
{¶ 70} The ordinary meaning of "total rentable area" is easy to discern. It refers to
those portions of Lot Parcel 2 capable of being leased to commercial tenants. Exhibit A
makes clear that only the five-unit commercial strip on the eastern side of Lot Parcel 2 is
rentable space. The western portion marked "FUTURE DEVELOPMENT" contains no
structures available for lease.6 The total rentable area therefore equals approximately
9,425 square feet (the sum of the square footages of each of the units shown on Exhibit
A). Harder's 2,450 square foot premises comprises 26% (rounded for simplicity) of this
total.
{¶ 71} The straightforward application of Section 2.4's formula produces this result:
Harder must pay 26% of all CAM charges. CAM charges, in turn, include real estate taxes
on the Shopping Center. And the Shopping Center, as we have shown, means all of Lot
Parcel 2 as described in Exhibits A and A-1. The Lease contains no provision authorizing
treatment of real estate taxes differently from any other CAM expenses. Nor does it permit
dividing Lot Parcel 2 for tax allocation purposes while treating the parcel as a whole for
other purposes.
{¶ 72} The definition of "Common Areas" in Section 1.1 of the Lease reinforces
this conclusion. Common Areas include "the parking areas, service roads, loading
facilities and sidewalks shown and depicted in Exhibit A, and other facilities as may be
designated from time to time by Landlord." Section 2.4(i) specifies that CAM charges
cover "real estate taxes, including assessments, all insurance costs, and all costs to
6. We note that this reading of the Lease's text, including Exhibit A, is consistent with ample testimony in the record. - 26 - Clermont CA2024-06-044 CA2024-06-047
maintain, repair, service, and replace the Common Areas." In other words, CAM charges
represent the aggregate costs of operating and maintaining all of Lot Parcel 2. The
tenants who lease space on Lot Parcel 2 collectively bear these costs. Each tenant's
share is determined by the proportion of total available space that tenant occupies. Harder
leases 26% of the available space and therefore pays 26% of the total CAM costs.
{¶ 73} This textual analysis resolves the issue. The Lease unambiguously requires
calculating Harder's proportionate share of real estate taxes based on the entire 2.114-
acre Lot Parcel 2, not merely its developed eastern half. Because the contractual
language is clear, our inquiry properly extends no further. Shifrin, 64 Ohio St.3d at 638
("If no ambiguity appears on the face of the instrument, parol evidence cannot be
considered in an effort to demonstrate such an ambiguity.").
4. The Improper Consideration of Extrinsic Evidence
{¶ 74} The magistrate and trial judge took a different approach. While they
examined the Lease's text, they evidently did not examine the phrase "total rentable area"
as we have done. More significantly, they relied on extrinsic evidence in construing the
Lease's terms. This evidence included marketing materials distinguishing between an
Emerald Complex and a Ruby Complex, testimony about the county treasurer's billing
practices for Lot Parcel 2's taxes, testimony about a mowing company billing for work
performed on Lot Parcel 2, and testimony about Perin's internal use of the "Emerald" and
"Ruby" nomenclature.
{¶ 75} This reliance on extrinsic evidence was error. The law is clear: courts may
consider extrinsic evidence only when contractual language is genuinely ambiguous or
when special circumstances imbue particular terms with unique meaning. Kelly v. Med.
Life Ins. Co., 31 Ohio St.3d 130, 132 (1987). Neither exception applies here. As
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demonstrated above, the Lease's terms regarding real estate tax allocation are
unambiguous when read in accordance with their plain meaning and in the context of the
full agreement. Nor did special circumstances create any technical or specialized
meaning for the terms at issue. The trial court therefore erred in looking beyond the
Lease's text.
5. Conclusion
{¶ 76} The Lease's plain language mandates calculating Harder's proportionate
share of real estate taxes based on the entire 2.114-acre Lot Parcel 2 as defined in
Exhibits A and A-1. While Exhibits A and A-1 acknowledge that Lot Parcel 2 contains both
developed and undeveloped components, the Lease provides no basis for treating these
components as separate properties for purposes of allocating real estate taxes. To adopt
Harder's reading would require us to insert terms into the agreement that the parties did
not include, effectively rewriting their bargain to favor one party over the other. This we
cannot do.
{¶ 77} We sustain Perin's first assignment of error.
E. Penalties and Interest for Breach
{¶ 78} Perin's second assignment of error alleges:
THE TRIAL COURT ERRED IN FINDING THAT PERIN WAS NOT ENTITLED TO PENALTIES AND INTEREST PURSUANT TO THE LEASE.
{¶ 79} Perin argues in its second assignment of error that the trial court erred when
it denied Perin's claim for penalties and interest on unpaid CAM charges. Through its
counterclaim for breach of contract, Perin sought approximately $281,000 in penalties
and interest under Section 2.5 of the Lease for Harder's alleged underpayment of rent.
The court, however, found these penalties "unconscionable" and denied them, concluding
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that the roughly 85-to-1 ratio between the penalty amount and Harder's actual CAM
underpayment of $3,297.96 was grossly disproportionate, particularly given that both
parties had breached the Lease. Section 2.5 of the Lease provides:
If Tenant shall fail to pay any Rent on or before its due date, then Tenant shall be assessed a late fee of five percent (5%) of the amount due each month until paid in full. Any unpaid amounts shall also bear interest in the amount of one and one- half percent (1 1/2%) per month, or the maximum allowed by the laws of the state in which the Shopping Center is located, whichever is less. Tenant shall also be obligated to pay to Landlord all expenses reasonably attendant upon the collection of any such past due rents or charges, including, but not limited to, court costs and attorneys' fees.
{¶ 80} Perin contends that the trial court improperly considered the parties' mutual
breaches and the proportionality of the penalties in denying what it characterizes as
mandatory contractual remedies. We agree with the trial court's determination.
{¶ 81} Although Ohio law generally respects parties' freedom to structure their
contractual relationships, including damages provisions, this freedom is not unlimited.
See Unifirst Corp. v. Yusa Corp., 2003-Ohio-4463, ¶ 30 (12th Dist.). The critical distinction
lies between legitimate liquidated damages, which courts will enforce, and impermissible
penalties, which they will not. Lake Ridge Academy v. Carney, 66 Ohio St.3d 376, 381
(1993). This distinction reflects contract law's foundational purpose: to compensate
parties for actual losses, not to punish breaches. See id. (punitive damages generally are
not recoverable for breach of contract "[b]ecause the sole purpose of contract damages
is to compensate the nonbreaching party for losses suffered as a result of a breach").
Indeed, absent independent tortious conduct, contract law eschews punishment
altogether. Id. Accordingly, while parties have considerable freedom to contract, courts
retain the equitable power to decline enforcement of penalties that would be
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unconscionable under particular circumstances. See Samson Sales, Inc. v. Honeywell,
Inc., 12 Ohio St.3d 27, 28-29 (1984).
{¶ 82} The circumstances here present an example of an unenforceable penalty.
Several factors compel this conclusion. First, the sheer magnitude of the disparity—
penalties approximately 85 times Harder's actual underpayment—bears no reasonable
relationship to any conceivable actual damages. See id. at 29 (requiring reasonable
relationship between liquidated damages and actual harm). Second, both parties
breached the Lease, with the trial court specifically finding that "[Harder's] breach was
partially a result of [Perin's] breach." The payment disputes arose from Perin's own errors
in CAM calculations, stemming from the declining cognitive health of Joseph Perin, Sr.
These erroneous charges naturally bred distrust and dispute. While Section 2.5's penalty
provisions are not unconscionable per se, their application must be considered in light of
the broader circumstances. In the unique circumstances here, the application of Section
2.5 would act as an unconscionable penalty.
{¶ 83} Perin contends that Harder could have avoided these penalties by paying
under protest or seeking earlier declaratory judgment. But this argument overlooks both
practical reality and sound policy. It would effectively punish commercial tenants for
raising legitimate challenges to incorrect charges in a non-litigation context—a result that
would chill meaningful dispute resolution in landlord-tenant relationships. Moreover, Perin
itself could have prevented this dispute through accurate CAM calculations or clearer
documentation.
{¶ 84} Our holding does not undermine the general enforceability of contractual
late fees or interest charges. Rather, we conclude only that under these specific
circumstances—where both parties breached their obligations, where the landlord's own
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errors sparked the payment disputes, and where the claimed penalties obscenely dwarf
any actual damages—the trial court properly exercised its discretion in declining to
enforce Section 2.5's penalty provisions. See Lake Ridge Academy, 66 Ohio St.3d at 381
(courts should examine the particular circumstances in evaluating enforceability of
liquidated damages; liquidated damages must be reasonable in light of actual damages);
R.L.R. Invests., LLC v. Wilmington Horsemens Group, LLC, 2014-Ohio-4757, ¶ 34-35
(12th Dist.) (invalidating significantly smaller proportional penalties).
{¶ 85} We find no error in the trial court's decision not to enforce the penalties and
interest provision in Section 2.5 of the Lease.
{¶ 86} We overrule Perin's second assignment of error.
F. Prevailing-Party Status
{¶ 87} Finally, we consider Harder's and Perin's competing arguments about
attorney fees together.
{¶ 88} Harder's third assignment of error states:
THE MAGISTRATE AND TRIAL COURT ERRED IN FINDING THAT BOTH PARTIES ARE PREVAILING PARTIES FOR THE PURPOSES OF DETERMINING AWARD OF ATTORNEY FEES.
{¶ 89} Perin's third assignment of error states:
THE TRIAL COURT ERRED WHEN IT DETERMINED THAT BOTH HARDER AND PERIN WERE "PREVAILING PARTIES."
{¶ 90} Both Harder and Perin challenge the trial court's determination that neither
party was entitled to attorney fees under Section 14.19 of the Lease because each
prevailed on different aspects of their claims. But we conclude that these assignments of
error are not ripe for our consideration, given our disposition of the other issues in this
case.
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{¶ 91} Our holding on Perin's first assignment of error, that the trial court erred in
dividing Lot Parcel 2 for real estate tax calculations, alters the damages landscape in this
case. The trial court's determination that Harder owed only $3,297.96 was predicated on
the erroneous real estate tax apportionment we have rejected. When recalculated to
include Harder's proportionate share of taxes on the entire parcel over the relevant period,
Perin's recovery will likely increase substantially. This dramatic shift in the parties' relative
success makes any current determination of prevailing-party status premature and
potentially incorrect.
{¶ 92} The ripeness doctrine counsels against deciding issues where the harm
asserted has not yet occurred or is speculative. State ex rel. Jones v. Husted, 2016-Ohio-
5752, ¶ 21 (stating that a claim is not ripe for review when it is "contingent upon future
events that might or might not occur"). Here, the question underlying the attorney fees
determination, which party ultimately prevailed and to what extent, cannot be properly
answered until the trial court completes its recalculation of real estate taxes. A prevailing-
party determination made on the current incomplete record would rest on a foundation of
shifting sand.
{¶ 93} We decline to reach Harder's third assignment of error and Perin's third
assignment of error because they are unripe. The trial court should reconsider the
attorney-fees issue after completing the recalculation of real estate taxes in accordance
with this opinion.
III. Conclusion
{¶ 94} We have overruled each of the assignments of error we have reached
except for Perin's first assignment of error. We have sustained that assignment of error,
holding that the trial court incorrectly calculated the CAM charges for real estate taxes.
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We have declined to reach the parties' third assignments of error regarding attorney fees
as unripe. Therefore, the trial court's judgment is affirmed in part and reversed in part.
This case is remanded for recalculation of real estate taxes and reconsideration of
attorney fees in accordance with this opinion.
HENDRICKSON and PIPER, JJ., concur.
JUDGMENT ENTRY
The assignments of error properly before this court having been ruled upon, it is the order of this court that the judgment or final order appealed from be, reversed in part, and this cause is remanded for recalculation of real estate taxes and reconsideration of attorney fees in accordance with the above Opinion. In all other respects, the judgment of the trial court is affirmed.
It is further ordered that a mandate be sent to the Clermont County Court of Common Pleas for execution upon this judgment and that a certified copy of this Opinion and Judgment Entry shall constitute the mandate pursuant to App.R. 27.
Costs to be taxed 30% to appellant and cross-appellee and 70% to appellee and cross-appellant.
/s/ Matthew R. Byrne, Presiding Judge
/s/ Robert A. Hendrickson, Judge
/s/ Robin N. Piper, Judge
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Cite This Page — Counsel Stack
2025 Ohio 4706, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harder-invests-llc-v-perin-tyler-family-found-llc-ohioctapp-2025.