Tanglewood Shopping Ctr., L.L.C. v. Riser Foods Co.

2018 Ohio 1183

• Court: Ohio Court of Appeals
• Decided: March 29, 2018
• Docket: 105364
• Status: Published

Opinion

[Cite as Tanglewood Shopping Ctr., L.L.C. v. Riser Foods Co., 2018-Ohio-1183.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 105364

TANGLEWOOD SHOPPING CENTER, L.L.C.

PLAINTIFF-APPELLANT

vs.

RISER FOODS COMPANY DEFENDANT-APPELLEE

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-13-808457

BEFORE: McCormack, P.J., E.T. Gallagher, J., and Blackmon, J.

RELEASED AND JOURNALIZED: March 29, 2018 ATTORNEY FOR APPELLANT

Paul M. Greenberger Berns, Ockner & Greenberger, L.L.C. 3733 Park East Drive, Suite 200 Beachwood, OH 44122

ATTORNEYS FOR APPELLEE

David J. Tocco Vorys, Sater, Seymour & Pease, L.L.P. 200 Public Square, Suite 1400 Cleveland, OH 44114

James S. Larrimer 301 Grant Street One Oxford Centre, 35th Floor Pittsburgh, PA 15219 TIM McCORMACK, P.J.:

{¶1} Plaintiff-appellant Tanglewood Square Delaware, L.L.C., appeals from the

decision of the trial court granting summary judgment for defendant-appellee Riser Foods

Company. For the reasons that follow, we affirm.

Factual and Procedural History

{¶2} Plaintiff-appellant Tanglewood Square Delaware, L.L.C. is the

successor-in-interest of plaintiff-appellant Tanglewood Square Shopping Center, L.L.C.

(“Tanglewood”) as the owner and landlord of the shopping center at which

defendant-appellee Riser Foods Company (“Riser”) is a tenant. Riser operates a Giant

Eagle supermarket at Tanglewood’s Geauga County, Ohio shopping center.

{¶3} In 1996, Riser’s predecessor-in-interest and Tanglewood entered into a

20-year commercial lease (the “lease”) under which Riser’s predecessor-in-interest rented

a “certain store building” of “approximately 63,733 square feet” to operate a supermarket.

{¶4} Under the lease, Riser was obligated to pay rent in two components.

Pursuant to section 3.1 of the lease, a “base rent” was calculated by multiplying a dollar

amount by square foot, with the cost per square foot increasing periodically as follows: [Cite as Tanglewood Shopping Ctr., L.L.C. v. Riser Foods Co., 2018-Ohio-1183.]

Lease Years Annual Base Rent Cost Per Sq. Feet Monthly Base Rent Year 1 $446.131 $7.00 $37,177.58 Year 2 $509,864 $8.00 $42,488.67 Years 3-5 $557,664 $8.75 $46,471.98 Years 6-10 $578,696 $9.08 $48,224.64 Years 11-15 $636,055 $9.98 $53,004.61 Years 16-20 $699,788 $10.98 $58,315.70 Years 21-25 $769,895 $12.08 $64,157.89 Years 26-30 $847,012 $13.29 $70,584.30 Years 31-35 $931,776 $14.62 $77,648.04

These figures reflect a total square footage of 63,733, in accordance with the description

of the premises in section 1.1 of the lease.

{¶5} Pursuant to section 3.2 of the lease, Riser was also obligated to pay

“percentage rent,” which was determined based on a percentage of gross sales in excess

of a determined annual break point. Additionally, section 4.1 of the lease required Riser

to make additional payments based on its proportional share of real estate taxes and

assessments, calculated using Riser’s “square foot area.”

{¶6} The original lease was amended by a November 20, 2008 Amendment to

Lease (the “amendment”). The dispute in this case revolves around Riser’s expansion of

their store pursuant to this amendment.

{¶7} In its third recital, the amendment stated: WHEREAS, the Original Premises is 66,297 square feet and Tenant desires

to expand the Original Premises to include an additional 12,351 square feet,

totaling 78,648 square feet within the area defined herein and noted as the

“Expansion Area” on the site plan attached hereto as Exhibit A.

We note, as the trial court did, that the square footage of the original premises stated in

the amendment is 2,564 feet larger than the figure that was used to calculate the base rent

under the original lease, with no explanation for the discrepancy.

{¶8} In addition to providing for Riser’s expansion, the amendment also had the

effect of amending and fully restating sections 3.1 and 3.2 of the lease. Under the terms

of the amendment, the base rent increased as follows:

Years Monthly Base Annual Base Rent Rent Original Term From the Expansion $77,009.50 $924,114.00 (as modified) Delivery Date through the 5th Lease Year 6th - 10th Lease Year $83,563.50 $1,002,762.00 11th - 15th Lease Year $90,117.50 $1,081,410.00 16th - 20th Lease Year $96,671.50 $1,160,058.00

Nothing in the amendment indicates that the base rent was calculated based on square

footage, as it had been in the original lease.

{¶9} While the amendment’s third recital stated the expansion area would be

12,351 square feet, the amendment contemplated an addition beyond that square footage.

Section 4(b) required Riser to “prepare and submit to Landlord a set of interior layout plans and exterior elevations and specifications for Tenant’s Expansion Work which

Landlord shall review and approve within fifteen (15) days after its receipt of the same.”

Section 4(b) went on to describe “Landlord Consent Items,” giving Tanglewood the sole

and exclusive right to either reject or accept Riser’s plans for the proposed expansion if,

among other reasons, Riser submitted plans that would “result in building improvements

beyond the boundary of the Expansion Area shown on the Site Plan.” The amendment

further noted that “if Landlord shall fail to give written notice to Tenant as to whether it

approves of or objects to the plans within said fifteen (15) day period * * * then Landlord

shall be deemed to have approved the plans as submitted.” The plans and specifications

approved or deemed approved were defined in the amendment as the “final plans.”

{¶10} Pursuant to the amendment, Riser submitted plans and specifications for the

expansion to Tanglewood for its approval on September 25, 2009. These plans included

specifications for the vestibule at issue in this case. On October 20, 2009, after the

15-day window had closed, Tanglewood notified Riser by email that the “plans and specs

are acceptable.”

{¶11} Upon receiving Tanglewood’s approval in accordance with the amendment,

Riser began construction on the expansion. Ultimately, the expansion work was 1,349

square feet larger than the expansion area described in the amendment’s third recital.

{¶12} Tanglewood concedes that it effectively approved Riser’s plans showing

construction beyond the expansion area, but it contends that it never agreed that Riser

could occupy this area “for free.” Similarly, Tanglewood argues that the vestibule, referred to by Tanglewood as the “Over-Expansion,” is not governed by the amendment.

Therefore, according to Tanglewood, Riser became a tenant at will with respect to the

vestibule upon completion of construction.

{¶13} Tanglewood, seeking compensation from Riser for Riser’s use and

occupancy of the vestibule, initiated the underlying action against Riser on December 20,

2013. In its second amended complaint, filed on February 27, 2014, Tanglewood

asserted claims for breach of contract, declaratory judgment, reformation of contract,

unjust enrichment, and trespass. Tanglewood’s claims for breach, declaratory judgment,

and reformation were premised on the idea that Riser’s addition was constructed partially

outside of the expansion area as defined in the amendment. Such an “over-expansion,”

according to Tanglewood, violated the express terms of the amendment. Tanglewood’s

unjust enrichment and trespass claims were likewise premised on the idea that because the

vestibule was approximately 1,349 square feet larger than the expansion area, that

“over-expansion” was not governed by the original lease or amendment.

{¶14} On June 10, 2014, Tanglewood filed a motion for partial summary

judgment, on its declaratory judgment claim, to the effect that Riser’s occupancy of the

additional square footage is as a tenant at will because the extra square footage is not

covered by the contract and that Riser is liable to Tanglewood for the reasonable value of

the extra square footage.

{¶15} On June 20, 2014, Riser filed a motion for summary judgment on the basis

that the lease clearly contemplates a fixed amount of base rent for the entire expansion, including the vestibule, because Tanglewood consented to the expansion without a

demand for additional base rent.

{¶16} On December 15, 2015, the trial court granted Riser’s motion for summary

judgment and denied Tanglewood’s motion for partial summary judgment.

{¶17} Tanglewood appealed the trial court’s dismissal of its unjust enrichment and

trespass claims, presenting two assignments of error for our review.

Law and Analysis

{¶18} In its first assignment of error, Tanglewood argues that the trial court erred

in granting summary judgment for Riser because the court erroneously held that “the

entire building as it exists after the expansion was built is the ‘premises’ which is

governed by the lease and the amendment.” Specifically, Tanglewood argues that the

trial court erred when it determined that the 1,349 square feet constituting the vestibule

could be governed by the amendment, even though the amendment changed the definition

of the “premises” to exactly 78,648 square feet.

{¶19} In its second assignment of error, Tanglewood argues that the trial court

erred when it denied Tanglewood recovery under theories of unjust enrichment and

trespass.

{¶20} In granting Riser’s motion for summary judgment, the trial court held that

the amendment changed the description of the leased property to mean “the ‘original

premises’ plus the ‘expansion area,’ and both of these areas are not defined in terms of an

exact number of square feet.” Therefore, according to the trial court, the vestibule at issue was within the amendment’s “expansion area” and thus governed by the

amendment.

{¶21} A trial court’s decision to grant summary judgment is reviewed de novo.

Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). This court

conducts an independent review of the record to determine whether summary judgment is

appropriate. Summary judgment is appropriate when “(1) no genuine issue as to any

material fact exists; (2) the party moving for summary judgment is entitled to judgment as

a matter of law; and (3) viewing the evidence most strongly in favor of the nonmoving

party, reasonable minds can only reach one conclusion which is adverse to the nonmoving

party.” Hull v. Sawchyn, 145 Ohio App.3d 193, 196, 762 N.E.2d 416 (8th Dist.2001).

{¶22} Tanglewood’s argument in its first assignment of error consists of a lengthy

discussion of the meaning of the terms “premises,” “expansion area,” and “tenant’s

expansion work” under the amendment. After a thorough review of the record, we

disagree with Tanglewood that the premises governed by the amendment was limited to

precisely 12,351 square feet. Although the third recital described the enlarged premises

as 78,648 square feet, the amendment went on to provide for the possibility that

Tanglewood could approve final plans for construction beyond that area, and Tanglewood

did in fact approve such plans.

{¶23} Further, the parties agreed in the original lease that the lease, as amended,

constitutes the entire agreement concerning the premises and shopping center. Section

23.7 of the lease expressly states that “there are no covenants, promises, agreements, conditions, or understandings either oral or written” between the parties other than those

provided for in the lease as amended. Therefore, the obligations imposed upon Riser by

the amended lease are the extent of such obligations to Tanglewood.

{¶24} Even if this court were to agree with Tanglewood’s interpretation of the

aforementioned defined terms, Tanglewood’s argument fails to explain why this court

should ignore the fact that Tanglewood consented to the very expansion it now attempts

to challenge in this litigation. At no point has Tanglewood suggested why this court

should overlook the fact that it consented to Riser’s plans in accordance with the

amendment, under which Riser was obligated to pay a fixed base rent.

{¶25} Tanglewood argues that nothing can be inferred from the amendment’s

explicit inclusion of its right to object to construction plans beyond the expansion area.

What is missing from this argument, and what this court views as critical to our analysis

of this case, is any legally persuasive reason for us to ignore the undisputed fact that

Tanglewood approved Riser’s plans. A dispute regarding the origin of Tanglewood’s

right to object to nonconforming plans becomes irrelevant where, as here, the right was

not exercised. The relevant inquiry is the effect of Tanglewood’s approval of Riser’s

plans.

{¶26} Tanglewood argues that its approval of Riser’s plans is “ineffective to

enlarge the Premises thereby” because there was no separate written and acknowledged

conveyance of the over-expansion. We are not persuaded by this argument. {¶27} We agree with the trial court that the effect of Tanglewood’s approval of the

final plans resulted in an increase to the total square footage of the premises governed by

the amendment. As discussed above, section 4(b) of the amendment contemplated a

situation in which Riser would submit plans resulting in construction beyond the 12,351

square foot expansion area and Tanglewood subsequently approved those plans. By

virtue of this approval, the plans became the final plans under the amendment.

{¶28} The amendment did not include any provision for either amending the

property description of the expansion area or increasing the base rent owed to

Tanglewood in the event that Tanglewood consented to expansion beyond 12,351 square

feet. Further, the amendment, unlike the original lease, did not include any indication

that the base rent was to be calculated according to square footage.

{¶29} Contrary to Tanglewood’s assertion, the effect of our interpretation of the

amendment is not to confer a benefit — in the form of 1,349 square feet — upon Riser

“for free.” Rather, we conclude that both parties received the benefit of their bargain.

Specifically, Riser received the entire post-construction expansion area in exchange for

the base rent and percentage rent described in section 3 of the amendment.

{¶30} In light of the existence of a fully integrated agreement between the parties,

together with the amendment’s contemplation of construction beyond the expansion area,

Tanglewood’s approval of such construction, and the absence of any provision or

indication that such an over-expansion would result in additional obligations for Riser, we

find Tanglewood’s first assignment of error to be without merit. {¶31} In light of the above, the trial court did not err in denying Tanglewood

recovery under theories of unjust enrichment and trespass. Therefore, Tanglewood’s

second assignment of error is also without merit.

{¶32} “Unjust enrichment occurs when a person ‘has and retains money or benefits

which in justice and equity belong to another.’” Johnson v. Microsoft Corp., 106 Ohio

St.3d 278, 2005-Ohio-4985, 834 N.E.2d 791, ¶ 20, quoting Hummel v. Hummel, 133 Ohio

St. 520, 528, 14 N.E.2d 923 (1938). In Ohio, a party asserting an unjust enrichment

claim must establish: “‘(1) a benefit conferred by a plaintiff upon a defendant; (2)

knowledge by the defendant of the benefit; and (3) retention of the benefit by the

defendant under circumstances where it would be unjust to do so without payment.’”

Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 183, 465 N.E.2d 1298 (1984),

quoting Hummel.

{¶33} “This court has repeatedly held that when ‘there is a valid, enforceable

contract * * * the doctrine of unjust enrichment is not applicable.’” Benefit Options

Agency, Inc. v. Med. Mut., 8th Dist. Cuyahoga No. 94245, 2010-Ohio-4495, ¶ 24, quoting

F&L Ctr. Co. v. H. Goodman, Inc., 8th Dist. Cuyahoga No. 83503, 2004-Ohio-5856, ¶

16. Unjust enrichment is an equitable remedy and, therefore, is unavailable where

parties have entered into an express contract concerning the same subject matter, absent

fraud or illegality. Bickham v. Standley, 183 Ohio App.3d 422, 428, 917 N.E.2d 330 (3d

Dist.2009). More to the point, “the theory of unjust enrichment cannot be used to reform [a] contract.” Willoughby v. Willoughby, 11th Dist. Trumbull No. 2012-T-0095,

2014-Ohio-743, ¶ 29.

{¶34} The lease, as amended, governed the parties’ respective obligations relating

to the premises and the shopping center. The amendment, in particular, was concerned

with Riser’s expansion. In pursuing an unjust enrichment claim, Tanglewood is asking

this court to ignore the fact that the parties negotiated the terms of the amendment, and

Riser has tendered payment to Tanglewood as it was required to do under the amendment.

The fact that Tanglewood had an unexpressed intention to charge Riser base rent based

on the square footage of the expansion is insufficient to succeed on an unjust enrichment

claim.

{¶35} Similarly, Riser is not liable to Tanglewood for trespass. Tanglewood cites

a case for the proposition that where a tenant holds over after the landlord has fixed an

increased rent, the tenant can be held liable for damages for trespass. Lane v. Greene,

21 Ohio App. 62, 68, 152 N.E. 790 (4th Dist.1926). This case is not analogous. The

parties agreed to an increased base rent for Riser’s expansion, memorialized in the

amendment, and Riser has not violated the terms of this amendment.

{¶36} To the extent that Tanglewood was attempting to pursue a claim for the

common law tort of trespass upon real property, this claim necessarily fails. Such a

claim “occurs when a person, without authority or privilege, physically invades or

unlawfully enters the private premises of another whereby damages directly ensue * * *.”

Apel v. Katz, 83 Ohio St.3d 11, 19, 697 N.E.2d 600 (1998), citing Linley v. DeMoss, 83 Ohio App.3d 594, 598, 615 N.E.2d 631 (10th Dist.1992). As discussed above,

Tanglewood expressly consented to Riser’s construction of the vestibule. In light of this

consent, it is unclear how Tanglewood could maintain an action that requires a finding

that Riser was acting without authority or privilege.

{¶37} For these reasons, we affirm the decision of the trial court granting summary

judgment to Riser.

It is ordered that appellee recover of appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this court directing the common

pleas court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.

________________________________________ TIM McCORMACK, PRESIDING JUDGE

EILEEN T. GALLAGHER, J., and PATRICIA ANN BLACKMON, J., CONCUR