Russell Realty Co. v. Feghali

699 N.E.2d 976, 121 Ohio App. 3d 291
CourtOhio Court of Appeals
DecidedJune 27, 1997
DocketNo. 71181.
StatusPublished
Cited by1 cases

This text of 699 N.E.2d 976 (Russell Realty Co. v. Feghali) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Russell Realty Co. v. Feghali, 699 N.E.2d 976, 121 Ohio App. 3d 291 (Ohio Ct. App. 1997).

Opinion

Spellacy, Judge.

Defendants-appellants, Joseph Feghali and Maroun, Inc., appeal the judgment of the trial court on their counterclaim for breach of contract in favor of plaintiffappellee, Russell Realty Company. Appellants assign the following errors for our review:

“I. The trial court erred in concluding notice of the exercise of Clause 5-C terminated the lease.
“II. The trial court erred in concluding that a lessee’s acts subsequent to the exercise of an option to terminate, but prior to the operative date of that option, did not waive lessee’s right to terminate under Clause 5-C.
“III. The trial court erred in concluding that lessee did not breach the lease by abandoning the premises on October 31,1994.
“IV. The trial court’s finding that Maroun instructed Russell to leave the premises pursuant to the exercise of the option under Paragraph 5-C is against the manifest weight of the evidence.”

Finding appellants’ appeal to lack merit, the judgment of the trial court is affirmed.

I

On March 14, 1995, appellee filed a small claims complaint in the Rocky River Municipal Court. Appellee sought to recover its security deposit from appellants in the amount of $1,833. On April 10, 1995, appellants filed their answer and counterclaim alleging breach of contract against appellee.

On July 21, 1995, because appellants’ counterclaim exceeded its monetary jurisdictional limit, the Rocky River Municipal Court transferred the case to the *293 Cuyahoga County Court of Common Pleas. Appellee’s complaint was filed in the court of common pleas on August 4,1995.

On July 29, 1996, a bench trial was conducted, and on July 30, 1996, the trial court found in favor of appellants on appellee’s complaint for the return of its security deposit and in favor of appellee on appellants’ counterclaim for breach of contract.

II

In November 1987, appellee and its successor corporation entered into a three-year lease agreement with Alex Kanareff for the rental of two thousand square feet of office space located at 27010 Center Ridge Road, Westlake, Ohio. Pursuant to Section 4 of the lease, appellee was obligated to make monthly rental payments in the amount of $1,833. The lease agreement also contained the following option clause:

“Notwithstanding any other provisions in this contract:

“5(c) If Lessee’s real estate brokerage business at this location is not profitable, lessee may terminate the lease three months after providing lessor with notice to that effect. Lessee shall leave the partitions, floor covering, wall covering and fixtures for the benefit of lessor.”

In November 1989, appellant Feghali, president of appellant Maroun, Inc., purchased Dover Village Center from Alex Kanareff. As part of the purchase agreement, appellants assumed appellee’s lease. On March 13, 1992, appellee entered into a Lease-Extension-Agreement with appellants, thereby extending the period of the lease for five years and increasing appellee’s monthly rent. The remainder of the original lease agreement stayed the same.

On March 16, 1993, appellee informed appellants, pursuant to Section 5(c) of the lease agreement, that it had not been profitable for at least three months and wished to invoke its option to terminate the lease effective June 30, 1993. Appellee, however, did not vacate the premises on June 30,1993.

On February 14, 1994, appellee again informed appellants that its business had not been profitable and that it wished to terminate the lease effective May 31, 1994. On June 16,1994, appellants informed appellee that it either must exercise its option based on its February 14, 1994 correspondence indicating that appellee wished to terminate the lease May 31, 1994, or appellants would consider Section 5(c) of the lease agreement stricken.

On July 26, 1994, appellee’s attorney informed appellants that appellee intended to exercise its right to terminate the lease and would vacate the property no later than October 1, 1994. Appellee continued to pay rent to appellants through *294 October 1994, and vacated the premises on October 22, 1994. On December 12, 1994, appellee informed appellants of their obligation to return the deposit by-December 22, 1994, in the amount of $1,833. The premises vacated by appellee remained vacant until February 1996.

HI

For purposes of this appeal, appellants’ first, second and third assignments of error will be addressed together. Appellants contend that the trial court erred in concluding that an option, once exercised by tendering proper notice, is effective as of the date of notice regardless of the subsequent conduct of the parties. Thus, appellants argue that the trial court erred in finding appellee did not breach the lease agreement when it vacated the premises on October 31, 1994.

Ohio courts have recognized the inherent contractual nature of lease agreements. Timber Ridge Invests. Ltd. v. Marcus (1995), 107 Ohio App.3d 174, 667 N.E.2d 1283. In construing and interpreting lease provisions, courts have applied traditional contract principles. Id. at 178, 667 N.E.2d at 1285; see Myers v. E. Ohio Gas Co. (1977), 51 Ohio St.2d 121, 5 O.O.3d 103, 364 N.E.2d 1369. Where terms of a contract are clear and unambiguous, a court cannot find a different intent from that expressed in the contract. Id. The intent of the parties is presumed to reside in the language they chose to employ in it. Id., citing Kelly v. Med. Life Ins. Co. (1987), 31 Ohio St.3d 130, 31 OBR 289, 509 N.E.2d 411, paragraph one of the syllabus. The court should not look to evidence outside the agreement unless the contract is unclear and ambiguous. Marcus, 107 Ohio App.3d at 179, 667 N.E.2d at 1285-1286. If the meaning is apparent, the terms of the agreement are to be applied, not interpreted. Id.

Section 5(c) of the instant lease provides as follows:

“Notwithstanding any other provisions in this contract:
“5(c) If Lessee’s real estate brokerage business at this location is not profitable, lessee may terminate the lease three months after providing lessor -with notice to that effect. Lessee shall leave the partitions, floor covering, wall covering and fixtures for the benefit of lessor.”

In the present case, appellee, on March 16, 1993, notified appellants that its business had not been profitable and therefore it would be invoking its option to terminate the lease within ninety days. Appellee, however, failed to vacate the premises by June 30, 1993, but continued to pay rent. On February 14, 1994, appellee, for a second time, notified appellants that its business had not been profitable and that it was invoking its option to terminate the lease effective May 31, 1994.

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699 N.E.2d 976, 121 Ohio App. 3d 291, Counsel Stack Legal Research, https://law.counselstack.com/opinion/russell-realty-co-v-feghali-ohioctapp-1997.