Windham v. 450 Invests., Inc.

2011 Ohio 1034

• Court: Ohio Court of Appeals
• Decided: March 7, 2011
• Docket: 2010-CA-00215
• Status: Published

Opinion

[Cite as Windham v. 450 Invests., Inc., 2011-Ohio-1034.]

COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

JUDGES: DEAN WINDHAM, ET AL : Hon. W. Scott Gwin, P.J. : Hon. Sheila G. Farmer, J. Plaintiff-Appellee : Hon. John W. Wise, J. : -vs- : : Case No. 2010-CA-00215 450 INVESTMENTS, INC. : : Defendant-Appellant : OPINION

CHARACTER OF PROCEEDING: Civil appeal from the Canton Municipal Court, Case No. 2009CVF6338

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: March 7, 2011

APPEARANCES:

For Plaintiff-Appellee For Defendant-Appellant

RONALD K. STARKEY RONALD T. GATTS 10689 Cleveland Avenue N.W., Ste B 159 S. Main Street, Ste. 812 Uniontown, OH 44685 Akron, OH 44308 [Cite as Windham v. 450 Invests., Inc., 2011-Ohio-1034.]

Gwin, P.J.

{¶1} Defendant-appellant 450 Investments, Inc. appeals a judgment of the

Municipal Court of Canton, Ohio, which awarded plaintiffs-appellees Dean Windham

and Noble Homes, Inc. $7,871.88 as overpayment for rent and electric bills. The court

awarded appellant $15.50 on its counterclaim for underpayment of rent. Appellant

assigns five errors to the trial court:

{¶2} “I. AS A MATTER OF LAW, THE TRIAL COURT FOUND THAT THE

LANGUAGE USED IN THE LEASES ENTERED INTO BY THE PARTIES WAS CLEAR

AND UNAMBIGUOUS WHEN IT PROPERLY APPLIED THE PAROL EVIDENCE RULE

TO EXCLUDE TESTIMONY FROM THE LESSOR WHEN SEEKING TO EXPLAIN THE

PARTIES INTENT OF THE UTILITIES SECTION OF THE LEASES, BUT THEN THE

TRIAL COURT ERRED AND ABUSED ITS DISCRETION BY FAILING TO ENFORCE

THE CLEAR AND UNAMBIGUOUS LANGUAGE IN THE LEASES THAT STATED

THE LESSEE WOULD PAY THE AMOUNT OF ITS MONTHLY UTILITIES AS

INVOICED FROM THE LESSOR.

{¶3} “II. THE COURT ERRED AND ABUSED ITS DISCRETION BY RE-

WRITING THE LEASES TO PROVIDE A MEANS OF CALCULATING HOW THE

LESSOR WAS PERMITTED TO INVOICE LESSEE AND LIMITED THE LESSEE’S

UTILITY LIABILITY TO ONLY ONE OF THE TWO METERS LOCATED AT THE

SUBJECT PROPERTY’S BUILDING DESPITE THE LESSEE’S ADMISSION THAT IT

KNEW AND AGREED WITH THE LESSOR THAT IT WAS LIABLE FOR ALL

UTILITIES TO THE ENTIRE LEVEL THAT IT LEASED FROM THE LESSOR. Stark County, Case No. 2010-CA-00215 3

{¶4} “III. THE COURT ERRED AND ABUSED ITS DISCRETION IN

CALCULATING DAMAGES AS THE AMOUNT OF THE JUDGMENT RENDERED FOR

PLAINTIFF AND AGAINST DEFENDANT WAS AGAINST THE MANIFEST WEIGHT

OF THE EVIDENCE.

{¶5} “IV. THE COURT ERRED AND ABUSED ITS DISCRETION IN

GRANTING JUDGMENT AGAINST LESSOR WHEN IN FACT THE EXHIBIT ON

WHICH THE COURT RELIED WAS ADMITTEDLY FLAWED AND NOT IN

RECONCILIATION WITH THE EVIDENCE AS PRESENTED TO THE COURT.

{¶6} “V. THE COURT ERRED AND ABUSED ITS DISCRETION IN NOT

FINDING THAT LESSEE WAIVED ITS RIGHT TO RECOUP THE OVERPAYMENT OF

RENT PURSUANT TO THE WRITTEN CORRESPONDENCE SPECIFICALLY

STATING THAT IT DID NOT WANT A RETROACTIVE CORRECTION OF THE

UTILITIES BEING CHARGED TO LESSEE.”

{¶7} Appellees Dean Windham and Noble Homes, Inc. leased commercial

property from 450 Investments, Inc. The property is located in Hartville, Stark County,

Ohio. The court found Noble Homes is a general contractor and Windham is its

president. 450 Investments is a corporation owned Dr. William L. Knop, D.C., and his

wife Natalie. The parties entered into a lease on October 25, 2002, for a three-year

term beginning December 1, 2002, for $542.00 per month. Sometime around April

2003, more space became available in the building and appellees expanded their area

to include a showroom. The new monthly rent was established at $987.00 per month.

Apparently the parties did not execute a new lease at that time. Stark County, Case No. 2010-CA-00215 4

{¶8} On March 25, 2005, the parties entered into a second written lease, from

April 1, 2005 to March, 2010, providing the rent would be $1,016.61 per month. The

court found because of the recession, appellees found they no longer needed or could

afford the additional space. Accordingly, the parties entered into a third written lease on

October 3, 2007. The lease was to run from October 3, 2007, to October 3, 2010. The

rent for the premises dropped to $262.50 per month.

{¶9} The written leases provided that appellees were to pay for their electrical

use. The court found it appears the appellant was unable to accurately ascertain how

much electricity the appellees used after they expanded their space in 2003. The

property had other tenants who were also being charged for their portions of the

property’s electric bill. The building had several electric meters, but the meters covered

some of the areas that were used in common by more than one tenant. To add to the

confusion, appellant did not always bill its tenants on a monthly basis, but would send

invoices grouped into several months at a time.

{¶10} Eventually appellees became suspicious they were being overcharged for

their electrical use, and began to question appellant both orally and in writing. In May

2008, appellees obtained copies of the actual Ohio Edison bills for the building.

Appellee Windham testified by using those bills and the charges submitted by the

appellant, he calculated appellees were overcharged $6,627.77.

{¶11} The trial court found appellant argued appellees had agreed to pay for 30

percent of the electrical costs for the common areas of the building in addition to the

cost of the actual square footage they rented. Unfortunately, for a period of time,

appellees were mistakenly charged for 70 percent of the electrical costs for the common Stark County, Case No. 2010-CA-00215 5

area, not 30 percent. Appellant conceded this mistaken charge made appellees’

electrical charges appear high, but denied the overcharged amount came anywhere

close to $6,627.77. The court found appellant asserted he and appellee Windham

verbally agreed to the 30 percent assessment for the common areas, but appellee

Windham denied any such agreement took place. None of the written leases mention

any responsibility of the tenant to pay for electrical service for common areas of the

building.

{¶12} In addition, Article XIX of each lease provides the lease sets forth the

entire agreement between the parties and there are no covenants, promises,

agreements, conditions or understandings either oral or written between them other

than what is in the lease. The court found appellant drafted each of the leases.

{¶13} The court also found appellees underpaid their rent for thirty one months,

paying $262.00 per month, which was $.50 less than the actual rental price of $262.50,

from October 2007 until March 2010. Appellant’s counterclaim asserted it was entitled

to late fees for the $.50 monthly underpayment. The court declined to award late fees,

finding appellant continually accepted late rent payments and waived its right to collect

late fees. The court also found appellees had inadvertently paid their October 2004 rent

twice, and after that, they had in effect been paying their rent a month in advance. The

court found this would more than compensate for missing $15.50 for the months

October 2007 to March 2010.

I & II.

{¶14} In appellant’s first assignment of error, appellant argues the trial court was

correct as a matter of law in finding the leases were clear and unambiguous, and thus, Stark County, Case No. 2010-CA-00215 6

excluded testimony from appellant regarding the parties’ agreement on the utilities.

However, appellant argues the court did not apply the clear and unambiguous language

properly. In its second assignment of error, appellant argues the court abused its

discretion by in effect re-writing the lease to provide a means of calculating how the

appellant should calculate the utility usage.

{¶15} The question of whether a contract is ambiguous is a question of law.

Latina v. Woodpath Development Company (1991), 57 Ohio St. 3d 212, 567 N.E. 2d

262. For this reason, this court reviews a trial court’s determination de novo, without

deference to the trial court. Graham v. Drydock Coal Company, 76 Ohio St. 3d 311.

1996-Ohio-393, 667 N.E.2d 949.

{¶16} If the terms of the contract are clear and unambiguous, courts must give

the words their plain and ordinary meaning and may not create a new contract by

finding the parties intended something not set out in the contract. Alexander v. Buckeye

Pipeline, (1978) 53 Ohio St. 2d 241, 374 N.E.2d 146. The particular circumstances of

the contract may give what would otherwise be plain language a special meaning.

Graham, supra. However, if the language of a contract is ambiguous, then the court

may hear parol evidence to resolve the ambiguity by ascertaining the intent of the

parties. Illinois Controls, Inc. v. Langham, 70 Ohio St. 3d 512, 1994-Ohio-99, 639

N.E.2d 771.

{¶17} The first two leases provided appellees were to pay for their electrical

usage by being invoiced every month for the amount used. The third lease stated

appellees would pay their own monthly utilities once invoiced by appellant. Stark County, Case No. 2010-CA-00215 7

{¶18} Appellant argues it invoiced the appellees for the amount it determined to

be appellees’ responsibility for use. Appellant urges the leases do not provide that

appellees are to be invoiced for what is actually being used from a specific meter, but

rather, for the share of utilities, as the appellant has determined and invoiced. Appellant

also argues it is of no consequence whether appellees were billed 70 percent of the

charges for the common areas rather than 30 percent. Appellant suggests it could

calculate appellees’ utility charges to be whatever it decided, and the parties’ contract

required appellees to pay whatever was invoiced, regardless of how much of the electric

bill was actually attributable to appellees’ use. The court rejected this argument, finding

the leases obliged appellees to pay only for what they used.

{¶19} The trial court refused to accept appellant’s testimony the parties had

orally agreed that appellees would pay a portion of the common area usage. The court

found none of the leases addressed that issue, and the parol evidence rule prohibited

consideration of any additional, oral clauses or agreements.

{¶20} We find the plain language of the first two leases states that appellees

were responsible for the amount used, and the third lease specifies appellees pay for

their own monthly utilities. This does not permit the interpretation that appellant was

free to invoice appellees for whatever amount it wished, regardless of what appellees

had used. We agree with the trial court the contracts are unambiguous, and appellant’s

assertion appellees were to pay for part of the common area electric usage was

inadmissible as barred by the parol evidence rule. Langham, supra.

{¶21} The first and second assignments of error are overruled. Stark County, Case No. 2010-CA-00215 8

III.

{¶22} In its third assignment of error, appellant argues the trial court erred in

calculating the damages, and its judgment is against the manifest weight of the

evidence.

{¶23} A judgment will not be reversed as being against the manifest weight of

the evidence if the record contains some competent and credible evidence going to all

the essential elements of the case. C.E. Morris Company v. Foley Construction

Company (1978), 24 Ohio St. 2d 279, 265 N.E.2d 554.

{¶24} The record contains a vast number of documents submitted by appellant

and appellees. A review of the documents leads us to conclude the trial court’s

determination of damages is supported by competent and credible evidence in the

record.

{¶25} The third assignment of error is overruled.

IV.

{¶26} In its fourth assignment of error, appellant argues in calculating damages,

the trial court relied on an exhibit which appellee Windham admitted was flawed and not

reconcilable with the evidence presented to the court. Specifically, appellant challenges

appellees’ Exhibit Number 6, a spreadsheet appellee Windham testified he created by

using the actual Ohio Edison bills for the premises. However, during cross examination,

appellee Windham admitted the numbers for December 2002 through May 2003 were

not included in the exhibit.

{¶27} At the beginning of the hearing, the parties stipulated to the admissibility of

the exhibit, although not necessarily to the accuracy of the contents. Appellant’s counsel Stark County, Case No. 2010-CA-00215 9

specifically referred to the spreadsheet calculations, and asserted appellant agreed it

was admissible and available for the court to weigh the credibility of the spreadsheets.

Appellant also argues the analysis on the spreadsheet was based upon Ohio Edison

invoices, which were not necessarily from appellees’ unit.

{¶28} The trial court’s judgment of July 29, 2010, does not specifically mention it

relied on appellees’ Exhibit 6, although the court cites to appellees’ Exhibits 1, 2, 3, 4, 5,

7, and 11. We conclude appellant has not demonstrated he was prejudiced by any

omission in the spreadsheet Exhibit 6, of which the court was aware pursuant to

appellee Windham’s testimony.

{¶29} The trial court noted appellant conceded that the appellees were charged

for 70% of the cost of the common area, not for the 30% to which appellant claimed the

parties had agreed. The trial court had a vast number of exhibits and calculations

including actual bills, from which it found as a matter of fact the appellees, had proven

by a preponderance of the evidence that over the course of the three leases, they had

overpaid appellant $6,627.77 for electric bills and $1,259.61 for rent.

{¶30} We find the trial court’s determination is supported by the evidence.

Accordingly, the fourth assignment of error is overruled.

V.

{¶31} In its fifth assignment of error, appellant urges the trial court erred and

abused its discretion in not finding the appellees waived their right to recoup the

overpayment of rent pursuant to written correspondence that specifically stated: “I am

not asking for a retroactive adjustment, only that the invoices in the future will reflect the

actual benefit and consumption.” Stark County, Case No. 2010-CA-00215 10

{¶32} Appellees argue the written correspondence refers to a period of time

when appellees were still attempting to get copies of the actual billing from appellant or

from Ohio Edison. Appellees characterize the statement as an offer of compromise and

not a waiver. A party may voluntarily relinquish a known right through words or by

conduct. State ex rel. Ford v. Cleveland Bd. of Education, (1943), 141 Ohio St. 124, 47

N.E.2d 223. In Finkbeiner v. Lutz (1975), 44 Ohio App.2d 223, 337 N.E.2d 655, the

lessees failed to pay their rent on time on numerous occasions and lessors accepted

the late payments. The Finkbeiner court held that the failure of the lessors to timely

object to the late payment of rent amounted to a waiver.

{¶33} We find the trial court did not err in declining to find the statement to be an

express waiver of the overpayment on its utility bills. We also find the court was correct

in finding appellant waived its right to late fees, and had the benefit of appellees’

inadvertent double payment in October 2004. The trial court was the trier of fact, and

was able to view the witnesses and to weigh the credibility of the evidence, and this

court will not find, based on this record, that the court committed error. Seasons Coal

Co., Inc. v. Cleveland (1984), 10 Ohio St.3d 77, 81, 461 N.E.2d 1273.

{¶34} The fifth assignment of error is overruled. Stark County, Case No. 2010-CA-00215 11

{¶35} For the foregoing reasons, the judgment of the Municipal Court of Canton,

Stark County, Ohio, is affirmed.

By Gwin, P.J.,

Farmer, J., and

Wise, J., concur

_________________________________ HON. W. SCOTT GWIN

_________________________________ HON. SHEILA G. FARMER

_________________________________ HON. JOHN W. WISE WSG:clw 0223 [Cite as Windham v. 450 Invests., Inc., 2011-Ohio-1034.]

IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO

FIFTH APPELLATE DISTRICT

DEAN WINDHAM, ET AL : : Plaintiff-Appellee : : : -vs- : JUDGMENT ENTRY : 450 INVESTMENTS, INC. : : : Defendant-Appellant : CASE NO. 2010-CA-00215

For the reasons stated in our accompanying Memorandum-Opinion, the

judgment of the Municipal Court of Canton, Stark County, Ohio, is affirmed. Costs to

appellants.

_________________________________ HON. JOHN W. WISE