Opinion ID: 810835
Heading Depth: 1
Heading Rank: 2

Heading: Andersons’s Issues

Text: Andersons cross-appeals on three matters, contending that the district court erred in finding that Andersons failed to mitigate its damages, and that it should have been awarded prejudgment interest and attorneys fees.
Andersons argues that the court erred in finding that it failed to mitigate after the initial six months. According to Andersons, it should not have been required to scrap the cars because their long-term value was greater if left whole or to fix the cars because there was no market for them -10- Nos. 11-3984/11-4029 Andersons, Inc. v. LaFarge North America, Inc. during the time in question. Although we agree with Andersons on both points under these circumstances, we nonetheless conclude that Andersons is not entitled to additional holdover rent. Under Ohio law, an enhanced rent provision stemming from holdover is construed as liquidated damages, which may only be upheld “as long as it bears some relation” to the owner’s actual damages. Brunswick Ltd. P’ship v. Feudo, 870 N.E.2d 804, 807 (Ohio Ct. App. 2007). Similarly, the mitigation doctrine provides that an injured party may only be placed “in as good a position” as would be the case if there had been no breach. Frenchtown Square P’ship, 791 N.E.2d at 419 (citation omitted). Allowing Andersons to collect holdover rent indefinitely while it maintained exclusive control over the cars after Andersons knew that Lafarge had no intention to fix them, and knew there was no real market, would probably create a windfall for Andersons and an unenforceable penalty for Lafarge. We believe the district court reached a fair decision taking into account the particular facts of the case regarding the absence of a market for the cars at the end of the lease.
Andersons argues that the court erred in declining to award prejudgment interest. This is a debatable issue. Under Ohio law, “when money becomes due and payable upon . . . all judgments . . . for the payment of money arising out of . . . a contract . . . , the creditor is entitled to interest” at a statutory rate or as otherwise provided in the contract. Ohio Rev. Code Ann. § 1343.03(A). The Ohio law is somewhat unclear as to the interpretation of this statutory language. “[T]he trial judge has no discretion not to grant any interest award” if a plaintiff obtains a favorable judgment, Lincoln Elec. Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672, 693 (6th Cir. 2000) (applying Ohio law), -11- Nos. 11-3984/11-4029 Andersons, Inc. v. LaFarge North America, Inc. but trial courts have “broad discretion in determining when money becomes due and payable,” Lehrner v. Safeco Ins./Am. States Ins. Co., 872 N.E.2d 295, 312 (Ohio Ct. App. 2007). A trial court’s determination regarding a plaintiff’s entitlement to prejudgment interest on a contract is reviewed de novo. Eggert v. Meritain Health, Inc., 428 F. App’x 558, 569 (6th Cir. 2011) (citing Forest Hills Local Sch. Dist. Bd. of Ed. v. Huegel, Nos. CA2007-02-026, CA2007-02-032, 2008 WL 2102406, at  (Ohio Ct. App. May 19, 2008)). The date at which money is “due and payable” is a factual determination which is reviewed under an abuse of discretion standard. Gates v. Praul, No. 10AP–784, 2011 WL 6036397, at  (Ohio Ct. App. Dec. 6, 2011). The district court concluded that, in light of the uncertainties concerning damages, Andersons was not entitled to prejudgment interest on repair costs because that money was not “due and payable” until the court ordered it. Item 30(g) of the lease provided that interest “shall accrue” for payments “not made when due hereunder from the date thereof.” (Emphasis added). According to Andersons, payment was due when the claim accrued: the time of the return of the cars. However, the lease did not specify when repair costs from Lafarge to Andersons were “due.” Rather, the lease required Lafarge to fix the cars itself “promptly” and within a “reasonable time” of return. In the absence of a more definitive point for repair costs to become “due,” we cannot say that the district court abused its discretion in setting the judgment date as the starting time. See Hutchinson v. State Auto Ins. Co., No. 20636, 2002 WL 121202, at  (Ohio Ct. App. Jan. 30, 2002) (“When the facts and contract provisions are silent on the starting date for prejudgment interest, the time when the concluding step in the process of determining the amount payable is completed provides the method to identify the starting date.”). Moreover, the Ohio Supreme Court has stated that prejudgment -12- Nos. 11-3984/11-4029 Andersons, Inc. v. LaFarge North America, Inc. interest is not a penalty but rather “acts as compensation and serves ultimately to make the aggrieved party whole.” Royal Elec. Constr. Corp. v. Ohio State Univ., 652 N.E.2d 687, 692 (Ohio 1995). As the district court recognized, Andersons had not incurred repair costs before the judgment, so Andersons does not need interest on those costs to be “fully compensated.” See id. By contrast, holdover rent had a more definitive “due date” under the lease because it was specified to be “paid on demand” starting thirty days after the lease expiration. However, the district court concluded that Andersons is not entitled to prejudgment interest on holdover rent because Item 30(g) of the lease only allows for interest for “any payment, other than rent.” (Emphasis added by district court). We also note on this issue that there is a discrepancy in the record. The district court’s order accurately quotes Exhibit A of the complaint, which is a copy of the lease signed in April 1998, that excludes interest on rent. [R. 63, Amended Judgment Entry, at 5, PageID 1103; R.1-1, Complaint Exhibit A, at 1, PageID 5]. Yet Andersons’s briefs quote the same provision as “any payment, including rent.” [Second Br. 35; Fourth Br. 4-5]. Without argument or demonstration from either party as to which version of the lease controls—even though the “other than rent” provision was emphasized in bold font in the district court’s opinion and served as the only basis for denying interest on holdover rent—we cannot conclude that the court erred.
Finally, Andersons asserts that the court erred in not awarding it attorneys’ fees. A trial court’s determination regarding attorneys’ fees is reviewed for abuse of discretion. Furr v. State Farm Mut. Auto. Ins. Co., 716 N.E.2d 250, 265 (Ohio Ct. App. 1998). Item 25 of the lease provided: -13- Nos. 11-3984/11-4029 Andersons, Inc. v. LaFarge North America, Inc. Lessee shall pay Lessor’s costs and expenses incurred by reason of Lessee’s breach or default which shall include, without limitation, . . . collecting rents and professional fees and expenses with respect to or incurred by reason of the breach or default, including legal fees and expenses for advice and legal services in any actions or proceedings which Lessor may commence or in which Lessor may appear or participate to exercise or enforce any rights or remedies or to protect or preserve any rights or interests, and in all reviews of and appeals from any such actions or proceedings. Under Ohio law, a contractual right to attorneys’ fees is generally “enforceable and not void as against public policy so long as the fees awarded are fair, just and reasonable as determined by the trial court upon full consideration of all of the circumstances of the case.” Wilborn v. Bank One Corp., 906 N.E.2d 396, 400 (Ohio 2009) (quoting Nottingdale Homeowners’ Ass’n, Inc. v. Darby, 514 N.E.2d 702, 707 (Ohio 1987)). The district court, relying on our decision in Big Lots Stores, Inc. v. Luv N’ Care, Ltd., 302 F. App’x 423, 426-29 (6th Cir. 2008), found the provision at issue here unenforceable because it was a “standard paragraph in the Lease and was not negotiated between the parties” and constituted a “one-way street” that only ran in favor of Andersons. In Big Lots Stores, we followed binding Ohio and Sixth Circuit cases that voided similar provisions, notwithstanding “some indication of a shift in the law” among Ohio courts. Id. Although Ohio courts remain divided, see JPMorgan Chase Bank, NA v. Corral, No. 10 CAE 09 0079, 2011 WL 3198270, at -15 (Ohio Ct. App. July 14, 2011) (reviewing cases), we find no “shift” from which to conclude that the district court abused its -14- Nos. 11-3984/11-4029 Andersons, Inc. v. LaFarge North America, Inc. discretion in voiding the provision here.7,8 In addition, the district court based its decision on the following findings: This Court agrees with LaFarge that this was a standard paragraph in the Lease and was not negotiated between the parties. Also, this provision was a “one-way street” that ran only in favor of Andersons. Further, this Court finds that there was a legitimate dispute between the parties as to the amount of the repairs and that both sides have “unclean hands” in the manner the “joint inspection” was handled at the outset. In balancing the equities in the case and recognizing the ambiguity of Ohio law on this subject, the district court exercised its discretion, and we do not find its conclusion unreasonable. For the reasons discussed above, the district court’s judgment is AFFIRMED in all respects. 7 We note that one panel of the Ohio Court of Appeals relied on our decision in Big Lots Stores to void a non-negotiated, attorneys’-fee provision. See Exec. Bus. Ctrs., Inc. v. TransPacific Mfg,. Ltd., No. L-08-1060, 2009 WL 282383, at  (Ohio Ct. App. Feb. 6, 2009). 8 Andersons argued in its reply brief that it is also entitled to attorneys’ fees pursuant to Ohio Rev. Code § 1319.02 (recently transferred from § 1301.21). This position is forfeited because Andersons sought attorneys’ fees solely pursuant to the contract in the district court and in its principal brief on appeal. See Armstrong v. City of Melvindale, 432 F.3d 695, 700 (6th Cir. 2006) (failure to present an argument to a district court generally forfeits the right to present it on appeal); United States v. Moore, 376 F.3d 570, 576 (6th Cir. 2004) (failure to raise arguments in opening memorandum or brief leads to forfeiture). -15-