In Re Kindinger

219 B.R. 214, 1998 Bankr. LEXIS 420, 1998 WL 170165
CourtUnited States Bankruptcy Court, N.D. Ohio
DecidedFebruary 12, 1998
Docket13-35167
StatusPublished

This text of 219 B.R. 214 (In Re Kindinger) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Kindinger, 219 B.R. 214, 1998 Bankr. LEXIS 420, 1998 WL 170165 (Ohio 1998).

Opinion

MEMORANDUM OF DECISION

JAMES H. WILLIAMS, Bankruptcy Judge.

Pending before the Court is an objection filed by Chapter 13 Debtors, Kim Edwin Kindinger and Linda Diane Kindinger, to the claim of Paul Gordon. Mr. Gordon has filed a response asserting that the entire amount of his claim is due. The Court conducted a hearing and took the matter under advisement.

*216 FACTS

On November 8,1988, the Debtors entered into a three-yéar lease with Charvid Construction Co.,‘ Inc. (Charvid) for a premises located in' Mansfield, Ohio. The term of the original lease was from March 1, 1989, to February 28, 1992. The lease provided for an option to renew for additional three-year periods. This provision did not specify that the option to renew must be exercised in writing. Both parties agree that the lease was orally renewed for an additional three-year term from March 1, 1992, to February 28, 1995. As a result of this renewal, monthly rent was increased from $750.00 to $854.11 as provided for in the renewal option provision in the lease. The Debtors used the premises to operate a video rental store known as Video World.

On or about February 16, 1990, Paul Gordon purchased the building leased by the Debtors from Charvid Construction. The lease between Charvid and the Debtors was assigned to Mr. Gordon. Mr. Gordon testified that the condition of the premises which the Debtors leased was in considerably worse condition when the Debtors vacated the premises in April, 1996, than when he originally inspected the premises in February, 1990.

At the hearing, Mr. Gordon introduced a series of photographs taken in May, 1996, which demonstrated the damage to the bathrooms, the heating/air conditioning unit, the walls and floors of the premises, and the front door which did not have an outside lock. Furthermore, the photographs showed that the Debtors left shelving nailed into the drywall, debris on the floor, and a sign which Mr. Gordon had to pay to remove. Mr. Gordon also introduced into evidence a list of repair and removal expenses totaling $11,-771.25 along with the checks written to pay the expenses and the invoices used to purchase building material, plumbing supplies, and material to repair the heating/air conditioning unit. Mr. Gordon also testified that he did not receive at least one month’s notice before the Debtors vacated the premises in April, 1996, and he asks to be compensated for at least one month’s rent in the sum of $854.11. Moreover, Mr. Gordon asserts that he was not able to offer the premises for rent until.September, 1996, because of the time needed to repair the damage left when the Debtors vacated the premises.

The Debtors presented their own photographs depicting the condition of the premises when they moved in on March 1, 1989. They testified that the premises were in poor condition when they initially leased the building and that they spent $20,000.00 to make improvements to the building. Specifically, the Debtors stated that the heating/air conditioning unit never worked, the bathrooms were stained, at least one of them was never used except for storage, and the walls were in poor condition. Further, the Debtors testified that they left the building in excellent condition and informed Mr. Gordon in February, 1996, that they would be vacating the premises in April, 1996. Moreover, the Debtors testified that in them opinion, the lease was not renewed for a second three-year term on February 28, 1995, and that they believed the lease was on a month-to-month basis because Mr. Gordon did not ask them to renew the leasé for another three-year period. The Debtors cite to the fact that the rent was never increased after the second alleged exercise of the renewal option which, in their minds, provides evidence that they had a month-to-month tenancy with Mr. Gordon. The Debtors filed a petition for relief under Chapter 13 of Title 11 of the United States Code on September 24, 1996, and their Chapter 13 plan was confirmed by this Court on November 18,1996.

DISCUSSION

The Court has jurisdiction in this contested matter by virtue of Section 1334 of Title 28 of the United States Code and General Order No. 84 entered in this district on July 16, 1984. This is a core proceeding under Section 157(b)(2)(B) of Title 28 of the United States Code. This Memorandum of Decision constitutes the Court’s findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure.

Lease Renewal Option

An election or option to renew a lease must be exercised to bring the renewal into effect. 65 O.Jur.3d Landlord and Ten *217 ant § 547 (1986). The election to exercise the option may be express or it may be inferred from the circumstances and the conduct of the parties. Id. If the provision for an extension or renewal expressly requires the giving of notice of election to exercise the option, then the giving of notice is necessary. However, in the absence of a specific provision regarding the matter of notice, any form of notice which informs the landlord that the tenant has exercised the option is sufficient. Id.

Where the provision for an extension or renewal does not expressly require notice, Ohio law holds that merely holding over under the lease constitutes an election to exercise the option which binds both parties for the term designated in the option. 65 O.Jur .3d Landlord and Tenant § 548 (1986). Furthermore, the act of holding over on a lease which provides for an extension or renewal under a different rent from that of the original lease term operates to bind both parties under the new rental terms. Id. In the case at bar, there was no evidence provided that the Debtors communicated, either orally or in writing, to Mr. Gordon that they did not wish to exercise the renewal option. Instead, the Debtors remained in the premises after the first renewal option expired on February 28, 1995, and continued to pay the increased monthly rent of $854.11 as specified in the renewal option until the premises were vacated in April, 1996.

Furthermore, the parties’ lack of a writing to provide evidence that the renewal option from March 1, 1995, to February 28, 1998, was exercised does not fall under the Statute of Frauds to render the option unenforceable thereby creating a month-to-month tenancy. This is because the lease between the parties failed to stipulate that notice of the exercise of the option must be in writing. In the absence of such a requirement in a lease, the notice to exercise the option may be given orally without violating the provisions of the lease or the Statute of Frauds which normally requires agreements concerning interests in land to be in writing. 51 O.JuR.3d Fraud and Deceit § 57 (1984). The reasoning is that the original lease between the parties satisfied the statute and incorporated within it the option to renew the lease for subsequent three-year terms.

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596 N.E.2d 492 (Ohio Court of Appeals, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
219 B.R. 214, 1998 Bankr. LEXIS 420, 1998 WL 170165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-kindinger-ohnb-1998.