Ashtabula Cnty. Airport Auth. v. Rich

103 N.E.3d 51

2017 Ohio 9263

ASHTABULA COUNTY AIRPORT AUTHORITY, et al., Plaintiffs–Appellees,

v.Joseph A. RICH, Defendant–Appellant.

NO. 2017–A–0018

Court of Appeals of Ohio, Eleventh District, Ashtabula County.

Decided December 26, 2017

David E. Pontius and Jason L. Fairchild, Andrews & Pontius, L.L.C., 4810 State Road, P.O. Box 10, Ashtabula, OH 44005 (For Plaintiff–Appellee, Ashtabula County Airport Authority).

Thomas L. Feher and Barbara A. Lum, Thompson Hine, L.L.P., 3900 Key Center, 127 Public Square, Cleveland, OH 44114 (For Plaintiff–Appellee, Dwight H. Bowden).

David A. McGee, Svete & McGee Co., L.P.A., 100 Parker Court, Chardon, OH 44024 (For Defendant–Appellant).

DIANE V. GRENDELL, J.

{¶ 1} Defendant-appellant, Joseph A. Rich, appeals from the judgments of the Ashtabula County Court of Common Pleas, granting plaintiffs-appellees, the Ashtabula County Airport Authority and Dwight H. Bowden's, Motion for Partial Summary Judgment and awarding them past due rent and attorney's fees. The issues to be determined in this case are whether a claim for rent that is not yet due and payable at the time a complaint is filed is a compulsory counterclaim and whether a counterclaim relating to indemnification for attorney's fees incurred during an underlying claim is compulsory. For the following reasons, we affirm in part, reverse in part, and remand the judgment of the court below.

{¶ 2} On February 17, 2015, appellees filed a Complaint against Rich. It alleged that, in 2013, Rich failed to comply with the terms of a lease agreement he had entered into with Ashtabula Airport Authority, under which Rich rented a portion of an aircraft hangar. The Complaint alleged that Rich breached the agreement by discontinuing use of electric power and using a portable generator within the hangar. After being notified via letter "of the 30–day termination of his tenancy * * * effective September 30, 2013," Rich did not vacate but instead filed suit against the appellees (Ashtabula County Court of Common Pleas Case No. 2013 CV 756). Rich ultimately left the hangar in December 2014.

{¶ 3} The appellees' Complaint raised two counts. Count One was for Breach of Contract for Unpaid Rent from October 2013 through December 2014. Count Two was for Indemnification for Attorney's Fees which were incurred when appellees defended the 2013 action brought by Rich in relation to the lease.

{¶ 4} Rich filed an Answer on April 16, 2015, arguing, inter alia, that the claims were "barred by Ohio Civ. R. 13 and the rules governing compulsory counterclaim."

{¶ 5} Appellees filed a Joint Motion for Partial Summary Judgment on September 2, 2015. They argued that Rich refused to vacate the hangar for over a year after their request to terminate the lease and did not make payments for rent from October 1, 2013 to December 15, 2014. Regarding the indemnification claim, they contended that the lease required Rich to pay for the attorney's fees they incurred from defending prior suits in relation to the lease and Rich's lack of compliance.

{¶ 6} Rich filed a Motion for Summary Judgment and Brief in Opposition on January 14, 2016. He argued that the rent arrearage is barred as a compulsory counterclaim that appellees failed to raise in previous proceedings. He also contended that the indemnity provision was barred as against public policy. The parties subsequently filed a reply and sur-reply.

{¶ 7} The following pertinent deposition testimony and exhibits were presented on summary judgment:

{¶ 8} Rich testified that he signed an agreement to lease the hangar for 2013. The terms of the lease provided, in pertinent part, for monthly payment of rent due on the 1st but accepted until the 21st prior to a determination of default, and required that no alterations be made to the property and that Rich follow the Ashtabula County Airport Rules and Regulations.

The lease contained an "Indemnification" clause which provided that the lessee:

shall indemnify, defend and save harmless Lessor, its agents, employees, trustees, officers, directors and contractors from and against any and all loss, [and] cost (including attorneys' fees) * * * arising from or in connection with (i) Lessee's use of, occupancy of, or activities in or about the Hangar Space; (ii) any breach or default by lessee of the provisions of this Agreement; [and] (iii) any negligent act or willful misconduct by Lessee * * *.

{¶ 9} Rich indicated that at some point during 2013, he requested that First Energy suspend the electricity to his hangar. He confirmed that he used a generator within his hangar, as well as installed an outlet for use with the generator. Dwight Bowden, the board president of the Ashtabula County Airport, testified that a prohibition against generators in the Rules and Regulations was in place to protect the safety of the airport.

{¶ 10} An August 13, 2013 letter from the Airport Authority's counsel to Rich indicated that his tenancy would be terminated on September 30, 2013, for violating the lease agreement due to his "discontinuation of electric power" and use of the portable generator. Rich testified that once he received the letter, he "immediately took the generator out, took the wiring out, [and] put it back to its regular state." Rich agreed that his plane remained in the hangar after receiving this letter from October 2013 through December 15, 2014, when he vacated the airport, but paid no rent for those months.

{¶ 11} On October 7, 2013, in Ashtabula County Court of Common Pleas Case No. 2013 CV 756, Rich filed a Complaint against the appellees and the Ashtabula Airport Board of Trustees, raising claims for Breach of Contract, Discriminatory Conduct, Breach of Good Faith, Declaratory Judgment, Breach of Fiduciary Duty, Fraud, and a violation of 42 U.S.C. §§ 1983 and 88. These claims arose primarily from the appellees' "attempt to terminate" and failure to extend the lease. After the matter was removed to federal court in relation to a First Amendment retaliation claim, it was remanded back to the Court of Common Pleas for resolution of the remaining claims.

{¶ 12} Ashtabula County Airport Authority filed a Landlord's Complaint on October 25, 2013, in the Ashtabula County Court, Eastern Area, asking for restitution of the premises and also alleging that Rich was in default for failure to pay rent in October 2013 and should be ordered to pay rent for any future months he did not tender payment. The court dismissed the matter on November 25, 2013, stating that it should have been raised in the Common Pleas Court, which had "first acquired jurisdiction." This decision was affirmed in Ashtabula Cty. Airport Auth. v. Rich , 11th Dist. Ashtabula No. 2013-A-0069, 2014-Ohio-4288, 2014 WL 4824938.

{¶ 13} On December 12, 2014, the Ashtabula County Court of Common Pleas issued a Judgment Entry in Case No. 2013 CV 756, granting the defendants' Motion for Judgment on the pleadings. It held that either party had the right to terminate the lease, without cause, by giving thirty days prior written notice to the other party, a right which the defendants properly exercised. Thus, Rich's claims were dismissed.

{¶ 14} In the present matter, following review of the foregoing summary judgment motions, evidence, and proceedings, in a March 30, 2016 Judgment Entry, the trial court granted the appellees' Joint Motion for Partial Summary Judgment and denied Rich's Motion for Summary Judgment. It found the claim for rent was not a compulsory counterclaim since, with the exception of the October 2013 rent, the remaining rent became due only after the appellees had filed their answer in Rich's underlying 2013 CV 756 claim. The court concluded that the indemnification clause for attorney's fees in the lease agreement was not unconscionable, and was enforceable for the purpose of collecting attorney's fees. Rich's subsequent Motion for Reconsideration was denied.

{¶ 15} Following a hearing on the issue of damages, the court found that Ashtabula County Airport Authority should be awarded an amount of $57,575 for attorney's fees and $3,132.38 for unpaid rent, and Bowden should be awarded an amount of $101,930 for attorney's fees.

{¶ 16} Rich timely appeals and raises the following assignments of error:

{¶ 17} "[1.] The trial court erred in denying Appellant, Joseph Rich's, Motion for Summary Judgment and granting Appellees, Ashtabula Airport Authority and Dwight Bowden's Motion for Summary Judgment on the issue of liability for attorney fees and rent arrearage under the hangar lease at issue.

{¶ 18} "[2.] The damage award rendered is against the manifest weight of the evidence and/or based upon inadmissible evidence."

{¶ 19} In his first assignment of error, Rich argues that the trial court erred in granting summary judgment in favor of the appellees.

{¶ 20} Pursuant to Civil Rule 56(C), summary judgment is proper when (1) the evidence shows "that there is no genuine issue as to any material fact" 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 that conclusion is adverse to the party against whom the motion for summary judgment is made, that party being entitled to have the evidence * * * construed most strongly in the party's favor."

{¶ 21} A trial court's decision to grant summary judgment is reviewed by an appellate court under a de novo standard of review. Grafton v. Ohio Edison Co. , 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). "A de novo review requires the appellate court to conduct an independent review of the evidence before the trial court without deference to the trial court's decision." (Citation omitted.) Peer v. Sayers , 11th Dist. Trumbull No. 2011-T-0014, 2011-Ohio-5439, ¶ 27, 2011 WL 5028693.

{¶ 22} Rich argues that both the attorney's fees/indemnification claim and the request for the rent arrearage should have been raised in the prior proceedings he initiated, as they were...