N.T.I. Ents., Ltd. v. Dental Prods. & Servs., Inc.

2019 Ohio 25

• Court: Ohio Court of Appeals
• Decided: January 7, 2019
• Docket: 2018-T-0018
• Status: Published

Opinion

[Cite as N.T.I. Ents., Ltd. v. Dental Prods. & Servs., Inc., 2019-Ohio-25.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

TRUMBULL COUNTY, OHIO

N.T.I. ENTERPRISES, LTD. : OPINION f.k.a. NTI, LTD., : Plaintiff-Appellee, CASE NO. 2018-T-0018 : - vs - : DENTAL PRODUCTS & SERVICES, INC., : Defendant, : ALVIN G. SULLIVAN, et al., : Defendant-Appellant.

Civil Appeal from the Trumbull County Court of Common Pleas. Case No. 2016 CV 00585.

Judgment: Reversed and remanded.

Frank R. Bodor, 157 Porter Street, N.E., Warren, OH 44483 (For Plaintiff-Appellee).

Jason Patrick Small, 839 Southwestern Run, Youngstown, OH 44514 (For Defendant- Appellant).

TIMOTHY P. CANNON, J.

{¶1} Appellant, Alvin G. Sullivan, appeals from the January 10, 2018 judgment

of the Trumbull County Court of Common Pleas, entering judgment in favor of appellee,

N.T.I. Enterprises, Ltd. f.k.a. NTI, Ltd. (“NTI”), following a damages hearing. The trial

court’s judgment is reversed and remanded. {¶2} The following undisputed facts are summarized from the pleadings and

motions contained in our record on appeal.

{¶3} On December 19, 1996, appellee entered into a 36-month lease

agreement with appellant, Patricia L. Sullivan, and D & M Products and Services, Inc.

(“Dental Products”).1 The Sullivans and Dental Products leased from appellee Suite

#110 in the Northwood Center at 1601 Motor Inn Drive, Girard, Ohio. The annual rent

was $24,800.04 per year, payable in advance monthly installments of $2,066.67. If

received on or before the fifth of any month, $2,041.67 would be accepted as rent in full.

{¶4} The lease expired on February 28, 2000. Subsequently, the parties

entered ten lease amendments and extensions, the last of which expired on February

28, 2010.2

{¶5} On February 27, 2012, Dental Products, Patricia L. Sullivan, and Eugene

Mickel executed a lease amendment and extension of the original lease for the period of

March 1, 2012, through December 31, 2013, at $2,381.00 per month with $2,356.00

accepted as rent in full if paid on or before the fifth of the month. Patricia L. Sullivan

signed individually and as President of Dental Products, and Eugene Mickel signed

1.At the time the original lease was signed, Dental Products was referred to as “D & M Products and Services, Inc.” As of the February 20, 2003 lease amendment and extension, it was referred to as Dental Products & Services, Inc.

2. (1) December 22, 1999, to extend the lease from March 1, 2000, through February 28, 2001, at

$2,221.00 per month with $2,196.00 accepted as rent in full if paid on or before the fifth of the month; (2) December 18, 2000, for March 1, 2001, through February 28, 2002, at $2,276.00 per month with $2,251.00 accepted in full if paid on or before the fifth of the month; (3) January 2, 2002, for March 1, 2002, through February 28, 2003, at $2,281.00 per month with $2,256.00 accepted as rent in full if paid on or before the fifth of the month; (4) December 26, 2002, for March 1, 2003, through February 28, 2004, with rent remaining the same; (5) December 29, 2003, for March 1, 2004, through February 28, 2005, with rent remaining the same; (6) January 4, 2005, for March 1, 2005, through February 28, 2006, with rent remaining the same; (7) January 13, 2006, for March 1, 2006, through February 28, 2007, with rent remaining the same; (8) January 8, 2007, for March 1, 2007, through February 28, 2008, with rent remaining the same; (9) January 28, 2008, for March 1, 2008, through February 28, 2009, with rent remaining the same; and (10) April 1, 2009, for March 1, 2009, through February 28, 2010, with rent remaining the same.

2 individually and as Vice President of Dental Products. Appellant was not a party to that

lease amendment and extension.

{¶6} On April 7, 2016, appellee filed a complaint for rent arrearages in the

Trumbull County Court of Common Pleas against appellant; Dental Products; Patricia L.

Sullivan, individually and as President of Dental Products; and Eugene Mickel,

individually and as Vice President of Dental Products. Appellee alleged the defendants

remained in possession of the premises upon expiration of the lease extensions,

becoming month-to-month tenants but defaulted and failed to pay rent and utilities from

July 2015 through April 2016. Appellee demanded judgment against the defendants,

jointly and severally, in the amount of $25,647.00 together with costs and reasonable

attorney fees. Copies of the original lease agreement and each lease amendment and

extension were attached to the complaint. Patricia L. Sullivan was subsequently

dismissed from the case without prejudice upon a suggestion of bankruptcy.

{¶7} Appellee filed a motion for summary judgment on June 5, 2017. Appellee

argued appellant was liable under the terms of the original lease as a holdover tenant

because appellant signed the original lease individually and continued his occupancy

until he was evicted by court order. In the alternative, appellee argued appellant was

liable pursuant to a previous judgment of the Girard Municipal Court that ordered his

eviction from the premises.

{¶8} Attached to the motion for summary judgment were a magistrate’s

decision and a judgment entry from Girard Municipal Court case No. 2016CVG00295.

Those documents indicated that appellee filed an action in forcible entry and detainer in

the Girard Municipal Court against “Dental Products & Services, Inc. C/O Alvin G.

3 Sullivan, Statutory Agent; Alvin G. Sullivan; Patricia L. Sullivan, Individually & As

President of Dental Products & Services, Inc.; Eugene Mickel, Individually & As Vice-

President of Dental Products & Services, Inc.” The sole issue in the municipal court

case was whether a default had occurred that entitled appellee to possession of the

premises at issue. In a judgment entry dated May 13, 2016, the municipal court

adopted the April 26, 2016 magistrate’s decision, which determined that a default had,

in fact, occurred and ordered a writ of restitution to issue.

{¶9} Also attached to the motion for summary judgment were several

documents purporting to demonstrate that appellant had remained on the premises until

he was evicted and an affidavit attesting to the amount of damages owed. Appellant

filed a response, and appellee filed a reply.

{¶10} Appellant also filed a motion for summary judgment. Appellant argued he

was not liable because he never signed a personal guaranty to the original lease

agreement or to any of the amendments and extensions to which he was a party and

because he was not a party to the February 27, 2012 amendment and extension.

Appellee filed a memorandum contra appellant’s motion for summary judgment.

{¶11} The trial court filed a judgment entry on October 20, 2017, which states:

The Girard Municipal Court, Case No. 2016CVG00295, found the following defendants were in default of the rental agreement with Plaintiff: Dental Products & Services, Inc.; Alvin G. Sullivan; Patricia I. Sullivan [sic]; and Eugene Mickel.

***

Defendant Alvin G. Sullivan has * * * filed a motion for summary judgment. * * * [T]he Court must defer to the decision of the Girard Municipal Court which already found the defendants in breach of the rental agreement for non-payment of rent. The issue remaining for determination though is the amount of damages.

4 As to the Plaintiff’s motion for summary judgment, the Court finds there remain genuine issues of material fact as to the amount of damages which are in dispute. Upon review, the Court finds reasonable minds could reach different conclusions as to that amount of damages.

The motions for summary judgment are hereby denied. This matter is set for a hearing on damages[.]

The trial court’s judgment entry states that both appellee’s and appellant’s motions for

summary judgment are denied. However, the trial court determined liability based on

principles of the doctrine of res judicata, which was an argument raised by appellee in

its motion for summary judgment. Therefore, the trial court effectively granted

appellee’s motion for summary judgment on the issue of liability but denied the motion

regarding the amount of damages.

{¶12} A hearing on damages took place on November 30, 2017. At the hearing,

Barbara Rosier-Tyron, a partner of NTI, who also acts as office manager, testified.

Exhibits were introduced that showed no rent was paid from July 2015 through April

2016. Ms. Rosier-Tyron testified that appellant vacated the premises “sometime after

the eviction hearing in Girard.” She could not recall the exact date but affirmed it was in

“the first part” of May 2016 and that appellant occupied the premises up until the

eviction.

{¶13} A judgment entry filed January 10, 2018, states that the parties stipulated

to the following damages: “(1) rent was due in the amount of $25,647.84 and (2) the

outstanding utilities amount was $1,837.84.” The trial court noted that appellant

continued to dispute his personal liability at the damages hearing. However, the court

stated: “[T]he Court had previously ruled on that issue and found the Girard Municipal

5 Court had already found the Defendants, the corporation and the individual defendants,

were in breach of the lease agreement for the non-payment of rent.” The trial court

found in favor of appellee and entered judgment against Dental Products, Eugene

Mickel, and appellant, jointly and severally, in the amount of $27,485.68 for unpaid rent

and utilities arising from the lease agreement with appellee.

{¶14} Appellant noticed a timely appeal from the trial court’s judgment. He

raises two assignments of error on appeal, which we address together:

[1.] In its January 18, 2018 Judgment Entry, the trial court abused its discretion when it found Defendant-Appellant Alvin G. Sullivan liable for damages for non-payment of rent arising from an agreement to extend a commercial lease of land to which Mr. Sullivan was not a party.

[2.] In its January 18, 2018 Judgment Entry, the trial court abused its discretion when it employed the findings of a municipal court in a prior proceeding for forcible entry and detainer to preclude Defendant-Appellant Alvin G. Sullivan from presenting a defense to claims for damages asserted against him.

{¶15} Appellant states the applicable standard of review is abuse of discretion.

The trial court’s judgment entry indicates appellant stipulated to the amount of

damages, and appellant does not take issue with the amount of damages on appeal.

As previously stated, the trial court effectively granted appellee’s motion for summary

judgment on the issue of liability. On appeal, we review a trial court’s entry of summary

judgment de novo, i.e., “independently and without deference to the trial court’s

determination.” Brown v. Cty. Commrs. of Scioto Cty., 87 Ohio App.3d 704, 711 (4th

Dist.1993) (citation omitted); see also Grafton v. Ohio Edison Co., 77 Ohio St.3d 102,

105 (1996). Further, the trial court’s determination that an action is barred by res

6 judicata is a question of law that an appellate court reviews de novo. Rossow v. City of

Ravenna, 11th Dist. Portage No. 2001-P-0036, 2002 WL 480061, *2 (Mar. 29, 2002).

{¶16} Civ.R. 56(C) provides that summary judgment is proper when

(1) [n]o genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977). “[T]he moving party bears

the initial responsibility of informing the trial court of the basis for the motion, and

identifying those portions of the record before the trial court [e.g., pleadings,

depositions, answers to interrogatories, etc.] which demonstrate the absence of a

genuine issue of fact on a material element of the nonmoving party’s claim.” Dresher v.

Burt, 75 Ohio St.3d 280, 292 (1996), citing Civ.R. 56(C) and Celotex Corp. v. Catrett,

477 U.S. 317, 323-324 (1986). If the moving party satisfies this burden, the nonmoving

party has the burden to provide evidence demonstrating a genuine issue of material

fact, pursuant to Civ.R. 56(E). Id. at 293.

{¶17} Appellant maintains the trial court improperly applied the doctrine of res

judicata because the issue of appellant’s personal liability under the lease agreement

was not at issue or determined in the forcible entry and detainer action in the Girard

Municipal Court.

{¶18} “The doctrine of res judicata encompasses the two related concepts of

claim preclusion, also known as res judicata or estoppel by judgment, and issue

preclusion, also known as collateral estoppel.” O’Nesti v. DeBartolo Realty Corp., 113

Ohio St.3d 59, 2007-Ohio-1102, ¶6, citing Grava v. Parkman Twp., 73 Ohio St.3d 379,

7 381 (1995). Claim preclusion prevents subsequent actions by the same parties based

on claims arising out of a transaction that was the subject matter of a previous action.

Id., citing Fort Frye Teachers Assn., OEA/NEA v. State Emp. Relations Bd., 81 Ohio

St.3d 392, 395 (1998). Issue preclusion prevents relitigation of any fact or point that

was determined by a court of competent jurisdiction in a previous action between the

same parties and applies even where the causes of action differ. Id., citing Fort Frye,

supra, at 395.

{¶19} An action in forcible entry and detainer “determines the right to immediate

possession of the property and nothing else.” Seventh Urban, Inc. v. Univ. Circle

Property Dev., Inc., 67 Ohio St.2d 19, 25, fn.11 (1981) (citation omitted). Pursuant to

R.C. 1923.03, judgments rendered in forcible entry and detainer actions “are not a bar

to a later action brought by either party.” The statute is clear that a judgment in a

forcible entry and detainer action does not bar a later action between the same parties

concerning the same subject matter. Great Lakes Mall, Inc. v. Deli Table, Inc., 11th

Dist. Lake No. 93-L-154, 1994 WL 587559, *2 (Sept. 16, 1994). However, “a forcible

entry and detainer action bars relitigation of issues that were actually and necessarily

decided in the former action.” Id. (citations omitted).

{¶20} Based on the documents attached to appellee’s motion for summary

judgment, it is clear that possession of the premises was the only issue resolved in the

municipal court. The magistrate’s decision pertains to a “Hearing on First Cause of

Action for Restitution of the Premises.” The magistrate’s decision states: “Defendant(s)

are in Default of Rental Agreement and have been properly served with notice to vacate

the premises.” It further states: “WRIT OF RESTITUTION to issue upon Plaintiff’s

8 application.” The judgment entry that adopts the magistrate’s decision states: “The

Court has reviewed the pleadings and the evidence submitted and hereby adopts the

Decision of the Magistrate pursuant to Ohio R. Civ. Pro. 53 and enters judgment as

follows: Writ to issue as ordered.” Although the municipal court determined the

defendants were in default of the rental agreement, it did not determine that appellant

was personally liable for the unpaid rent. Therefore, litigation of the issue of liability in

the common pleas court was not barred by the doctrine of res judicata.

{¶21} Appellant argues he is not liable for the unpaid rent because he did not

sign the February 27, 2012 amendment and extension to the lease. Appellant

maintains that, pursuant to the statute of frauds, lease agreements must be in writing

and signed by the party against whom enforcement is sought.

{¶22} Ohio’s statute of frauds requires that commercial lease agreements be in

writing and signed by the party to be charged. R.C. 1335.04 & R.C. 1335.05. Here,

there was a signed writing, as it is undisputed that appellant signed the original lease

agreement.

{¶23} Appellant further argues that although he signed the original lease

agreement, the damages awarded to appellee derive solely from the February 27, 2012

amendment and extension, and because he did not sign that amendment and

extension, it is not enforceable against him. Appellee responds that even though

appellant did not sign the last lease extension of February 27, 2012, he is liable as a

holdover tenant under the original lease because he remained in possession of the real

estate until he was evicted by court order in May 2016.

{¶24} The original lease contains a holdover clause, which states, in part:

9 If Tenant shall remain in possession of all or any part of the Premises after the expiration of the term or fail to completely remove its personal property, then Tenant shall be deemed a Tenant of the Premises from month to month, notwithstanding any law to the contrary, at the same rental (unless otherwise notified) and subject to all of the terms and provisions hereof, except only as to the term.

Each lease amendment and extension contains language that the parties agreed to

continue to be bound by the terms of the original lease. Further, there was evidence

presented at the damages hearing that appellant did not vacate the premises until he

was evicted by court order in May 2016. See Jones v. Simondis, 11th Dist. Trumbull

No. 97-T-0073, 1998 WL 156871, *4 (Mar. 27, 1998), quoting Pyros v. Gould, Inc., 8th

Dist. Cuyahoga No. 61999, 1993 WL 146639, *4 (May 6, 1993) (emphasis sic) (“‘It is

well established that when a tenant, after the expiration of the term of a lease, holds

over into another term without any new agreement or arrangement with the landlord, the

latter may treat him as a tenant for another term at the same rent and upon the terms

and conditions of his occupancy or, as a trespasser at his election.’”).

{¶25} However, it is also undisputed that appellant was not a party to the

February 27, 2012 lease amendment and extension. The tenants to that lease had a

right to possession of the premises to the exclusion of all others. See DiRenzo v.

Cavalier, 165 Ohio St. 386 (1956), paragraph one of the syllabus, (“[A] lease gives the

right of possession of the land and the exclusive occupation of it for all purposes not

prohibited by its terms.”). It is unclear what effect, if any, the February 27, 2012

amendment and extension had on the original lease, as there exists some confusion

regarding the terms of both documents.

10 {¶26} First, the capacity in which Patricia L. Sullivan and appellant signed the

original lease agreement is unclear. The original lease agreement states: “THIS LEASE

AGREEMENT made and entered into this 19th day of December, 1996, * * * by and

between the Parties named in Section 1 which parties in consideration of their mutual

covenants herein set forth and do hereby agree as herein specified.” Section 1 of the

lease identifies two tenants: Patricia L. Sullivan and appellant. Section 1(C) designates

appellant as a co-tenant and states appellant and Patricia L. Sullivan are doing

business as “D & M Products and Services, Inc.” However, the signature page of the

original lease identifies three tenants: “Tenant - D & M Products and Services, Inc. BY:

Patricia L. Sullivan, President”; “Tenant – Patricia L. Sullivan, Individually”; and “Tenant

– Alvin G. Sullivan, Individually”. Appellant’s signature appears above the signature line

designated for him. The April 1, 2009 amendment and extension, the last amendment

and extension signed by appellant, also identifies three tenants: “Tenant: dental

products & services, inc. by: Patricia L. Sullivan, Pres.”; “Tenant: Patricia L. Sullivan

(Individually)”; and “Tenant: Alvin G. Sullivan (Individually)”.

{¶27} In the final lease amendment of February 27, 2012, no signature line

appears for appellant in any capacity. Notably, rather than identifying Patricia L.

Sullivan and Eugene Mickel as tenants, the only identified tenant is Dental Products.

The signature lines are designated as follows: “Tenant: dental products & services, inc.

by Patricia L. Sullivan, Pres.; by: Patricia L. Sullivan (individually)” and “Tenant: dental

products & services, inc. by Eugene Mickel, Vice Pres.; by: Eugene Mickel

(individually)”.

11 {¶28} Next, while the original lease identifies the leased premises as Suite #110

at 1601 Motor Inn Drive, the April 1, 2009 and February 27, 2012 lease amendments

and extensions indicate the premises is “1601 Motor Inn Drive – Suite #100 & 110.”

{¶29} We conclude it was error for the trial court to determine appellant’s liability

on the basis of res judicata. Accordingly, the trial court’s judgment is reversed.

Whether appellant is individually liable for the rent arrearages depends on whether he

was a holdover tenant under the original lease agreement even though he was not a

party to the final lease amendment and extension. This matter is remanded for the trial

court to clarify the discrepancies in the original lease agreement and its subsequent

extensions and to determine appellant’s liability. Appellant should be afforded the

opportunity to present a defense to his liability.

{¶30} Appellant’s first and second assignments of error have merit to the extent

discussed.

{¶31} The judgment of the Trumbull County Court of Common Pleas is reversed

and remanded for further proceedings consistent with the foregoing opinion.

THOMAS R. WRIGHT, P.J.,

CYNTHIA WESTCOTT RICE, J.,

concur.