Court Opinion

ID: 2698728
Source: CourtListenerOpinion
Date Created: 2014-08-04 17:54:30.460229+00
Date Added: 2024-06-11T12:51:13.982091
License: Public Domain

[Cite as Dollar Bank Leasing Co. v. Elms Country Club, 2013-Ohio-2974.]

                                      COURT OF APPEALS
                                     STARK COUNTY, OHIO
                                  FIFTH APPELLATE DISTRICT

DOLLAR BANK LEASING CO.                                  JUDGES:
                                                         Hon. John W. Wise, P. J.
        Plaintiff-Appellee                               Hon. Patricia A. Delaney, J.
                                                         Hon. Craig R. Baldwin, J.
-vs-
                                                         Case No. 2012 CA 00202
ELMS COUNTRY CLUB

        Defendant-Appellant                              OPINION

CHARACTER OF PROCEEDING:                             Civil Appeal from the Court of Common
                                                     Pleas, Case No. 2004 CV 03858

JUDGMENT:                                            Affirmed

DATE OF JUDGMENT ENTRY:                              July 8, 2013

APPEARANCES:

For Plaintiff-Appellee                               For Defendant-Appellant

ERIC T. DEIGHTON                                     JACOB T. WILL
PHYLLIS ULRICH                                       116 Cleveland Avenue NW
CARLISLE, MCNELLIE, RINI                             Suite 808
KRAMER & ULRICH                                      Canton, Ohio 44702
24755 Chagrin Blvd., Suite 200
Cleveland, Ohio 44112
Stark County, Case No. 2012 CA 00202                                                  2

Wise, P. J.

        {¶1}   Appellant Elms Country Club appeals the October 12, 2012, decision of

the Stark County Common Pleas Court granting summary judgment in favor of Appellee

Dollar Bank Leasing Corp.

                       STATEMENT OF THE FACTS AND CASE

        {¶2}   On February 14, 2004, Appellant Elms Country Club (Elms) and Appellee

Dollar Bank Leasing Corp. (Dollar Bank) entered into a commercial lease agreement in

which the vendor, Royal Links USA, Inc. (Royal Links), provided Elms with a piece of

equipment called a Beverage Caddy Express Cart

        {¶3}   Elms entered into the agreement after conversations with a representative

from Royal Links. Elms never spoke to a representative from Dollar Bank regarding

same. Elms understood the lease to be a "zero-net lease," and that Royal Links would

pay Elms the amount of the monthly lease payments for the equipment, which Elms

would then pay to Dollar Bank.

        {¶4}   The lease agreement listed the value of the total equipment cost as

$13,625.76. The obligation of Elms to Dollar Bank was 60 payments at $331.51 each.

        {¶5}   In October of 2004, Royal Links stopped making payments to Elms.

        {¶6}   The only payments received by Dollar Bank from Elms were four checks

each in the amount of $331.51.

        {¶7}   As of October 28, 2004, there remains due and owing on the commercial

lease agreement the sum of $13,692.38 plus interest thereafter at the rate of $4.61 per

diem.
Stark County, Case No. 2012 CA 00202                                                       3

          {¶8}   Elms retained the Beverage Caddy Express, and still has possession of

same at this time. Dollar Bank has never attempted to repossess the cart.

          {¶9}   On November 15, 2004, Dollar Bank Leasing Corp. filed a Complaint

against Elms Country Club for breach of contract.

          {¶10} On May 25, 2005, Elms filed a third-party complaint against Royal Links

USA.

          {¶11} In August, 2005, this matter was stayed pending a bankruptcy action that

was filed by Royal Links USA.

          {¶12} Also in August of 2005, the trial court denied Dollar Bank's first motion for

summary judgment.

          {¶13} The case was stayed until approximately February of 2012, when the

Dollar Bank activated the case after Royal Links USA dissolved through the bankruptcy

action.

          {¶14} After discovery, depositions, and mediation, Dollar Bank filed a second

motion for summary judgment.

          {¶15} On October 12, 2012, after a response by Elms, the trial court granted

Dollar Bank's motion for summary judgment.

          {¶16} Appellant Elms Country Club now assigns the following error for review:

                                 ASSIGNMENT OF ERROR

          {¶17} “I. THE TRIAL COURT ERRED IN GRANTING APPELLEE'S MOTION

FOR SUMMARY JUDGMENT, AS A GENUINE ISSUE OF MATERIAL FACT

EXISTED.”
Stark County, Case No. 2012 CA 00202                                                     4

                                              I.

       {¶18} In its sole Assignment of Error, Appellant assigns error to the trial court’s

summary judgment ruling.

       {¶19} Civ.R. 56(C) provides, in pertinent part: “ * * * Summary judgment shall be

rendered forthwith if the pleadings, depositions, answers to interrogatories, written

admissions, affidavits, transcripts of evidence, and written stipulations of fact, if any,

timely filed in the action, show that there is no genuine issue as to any material fact and

that the moving party is entitled to judgment as a matter of law. * * * A summary

judgment shall not be rendered unless it appears from the evidence or stipulation, and

only from the evidence or stipulation, 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 or stipulation

construed most strongly in the party's favor. * * *.”

       {¶20} As an appellate court reviewing summary judgment issues, we must stand

in the shoes of the trial court and conduct our review on the same standard and

evidence as the trial court. Porter v. Ward, Richland App. No. 07 CA 33, 2007-Ohio-

5301, citing Smiddy v. Wedding Party, Inc. (1987), 30 Ohio St.3d 35. The party moving

for summary judgment bears the initial burden of informing the trial court of the basis for

its motion and identifying those portions of the record that demonstrate the absence of a

genuine issue of material fact. The moving party may not make a conclusory assertion

that the nonmoving party has no evidence to prove its case. The moving party must

specifically point to some evidence that demonstrates that the nonmoving party cannot

support its claim. If the moving party satisfies this requirement, the burden shifts to the
Stark County, Case No. 2012 CA 00202                                                    5

nonmoving party to set forth specific facts demonstrating that there is a genuine issue of

material fact for trial. Vahila v. Hall (1997), 77 Ohio St.3d 421, 429, citing Dresher v.

Burt (1996), 75 Ohio St.3d 280. A fact is material when it affects the outcome of the suit

under the applicable substantive law. See Russell v. Interim Personnel, Inc. (1999), 135

Ohio App.3d 301, 304.

       {¶21} Appellant herein argues that summary judgment was not proper in this

case because Appellee failed to mitigate damages and further because it was

fraudulently induced into executing the lease agreement by Royal Links, which they

argue was an agent of Dollar Bank Leasing Co.

       {¶22} Appellant herein argues that it “was under the impression and belief that

Appellee and Royal Links were acting in concert, and that Royal Links was an agent of

Appellee.” (Appellant’s Brief at 9).

                                       Agency Relationship

       {¶23} In order for a principal to be bound by the acts of his agent under the

theory of apparent agency, evidence must affirmatively show: (1) that the principal held

the agent out to the public as possessing sufficient authority to embrace the particular

act in question, or knowingly permitted him to act as having such authority, and (2) that

the person dealing with the agent knew of those facts and acting in good faith had

reason to believe and did believe that the agent possessed the necessary authority.

Master Consol. Corp. v. BancOhio Natl. Bank, 61 Ohio St.3d 570, 575 N.E.2d 817,

syllabus (1991).

       {¶24} Upon review, we find Appellant has failed to provide any evidence in

support of its agency/apparent authority claims. Appellant admits that it never had any
Stark County, Case No. 2012 CA 00202                                                       6

contact with Appellee. Instead, it argues that it believed an agency relationship existed

because Appellee “knowingly permitted Royal Links to provide the contract to

Appellant”.   (Appellant’s Brief at 10). Appellant offers no evidence that Appellee held

Royal Links out to the public as possessing authority to bind it or that it clothed Royal

Links with the appearance of authority. We therefore find Appellants have failed to

meet the first prong as set forth above.

       {¶25} Further, a review of the commercial lease agreement in this case does not

support Appellant’s position. The lease clearly delineates Elms as the Lessee, Royal

Links as the Vendor and Dollar Bank as the Lessor. Further, the lease contains the

following language in an “Exclusion of Warranties" clause:

       {¶26} "Lessee [Elms] acknowledges that Lessee [Elms] has selected the

Equipment without the advice or assistance of Lessor [Dollar Bank] and that Lessor

[Dollar Bank] has made no representations or warranties of any kind or nature, directly

or indirectly, express or implied, in connection with the Equipment, its durability, quality,

condition, or suitability for Lessee's [Elms] purposes."

       {¶27} The “Exclusion of Warranties” clause also states:

       {¶28} "No representations or warranties made by the Vendor [Royal Links] or

others with respect to the Equipment shall be binding on Lessor [Dollar Bank], nor shall

any breach thereof relieve Lessee [Elms] from any of Lessee's [Elms] obligations here

under."

       {¶29} Based on the unambiguous terms of the Lease Agreement, Appellee is

not responsible for any alleged misrepresentation of the value of the Equipment by
Stark County, Case No. 2012 CA 00202                                                  7

Royal Links, nor can any alleged false or fraudulent representations made by Royal

Links be imputed to Dollar Bank.

                                          Mitigation

      {¶30} Appellant argues that Appellee failed to mitigate its damages in this case

by failing to repossess the beverage caddy cart and further that the beverage caddy cart

was over-valued.

      {¶31} As a general rule, “an injured party has a duty to mitigate and may not

recover for damages that could reasonably have been avoided.” Chicago Title Ins. Co.

v. Huntington Natl. Bank, 87 Ohio St.3d 270, 276, 719 N.E.2d 955, 1999–Ohio–62,

citing S & D Mechanical Constrs. Inc. v. Enting Water Conditioning Syst. Inc., 71 Ohio

App.3d 228, 593 N.E.2d 354 (2nd Dist.1991). However, the obligation to mitigate is not

unlimited; the party is not expected to incur extraordinary expenses or to do what is

unreasonable or impracticable. Id.; Lucky Discount Lumber Co., v. Machine Tools of

Am., 181 Ohio App.3d 64, 2009–Ohio–543, ¶ 12 (2nd Dist.). In mitigating damages, an

injured party must use only ordinary and reasonable effort to avoid or lesson the

damages. Abroms v. Synergy Bldg. Sys., 2nd Dist. No. 23944, 2011–Ohio–2180, ¶ 58.

A defendant will not be held responsible for those damages that plaintiff could have

avoided with “reasonable effort” and “without undue risk or expense.” Hartz Plaza

Partners v. N.R. Dayton Mall, Inc., 12th Dist. No. CA89–11–066 (July 16, 1990).

      {¶32} In this case, a substantial portion of the value of beverage caddy cart

resided in the advertising and the “present and future attachments, accessories,

exchanges, accessions, accounts, general intangibles” and $2,000 worth of retail goods

to stock the beverage caddy cart, all of which was provided by Royal Links. Appellee
Stark County, Case No. 2012 CA 00202                                                     8

had no way to mitigate damages for the loss of these types of goods and services, nor

was in the business to engage in such type of activity. Further, Appellee only provided

the financing in this case. It did not set the value of the beverage caddy cart.

        {¶33} As to Appellant’s argument that the amount of interest is inequitable, this

Court finds that Appellee was not responsible for the seven (7) year delay during which

time the interest accrued on the lease. It was Appellant that brought Royal Links into

this action on a third party complaint, not Appellee. Further, Appellant cites no authority

for interest to toll in this matter.

        {¶34} Appellants’ sole Assignment of Error is overruled.

        {¶35} For the foregoing reasons, the judgment of the Common Pleas Court,

Stark County, Ohio, is affirmed.

By: Wise, P. J.

Delaney, J., and

Baldwin, J., concur.

                                             ___________________________________

                                             ___________________________________

                                             ___________________________________

                                                                   JUDGES
JWW/d 0625
Stark County, Case No. 2012 CA 00202                                         9

             IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO
                        FIFTH APPELLATE DISTRICT

DOLLAR BANK LEASING CO.                   :
                                          :
       Plaintiff-Appellee                 :
                                          :
-vs-                                      :         JUDGMENT ENTRY
                                          :
ELMS COUNTRY CLUB                         :
                                          :
       Defendant-Appellant                :         Case No. 2012 CA 00202

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

judgment of the Court of Common Pleas of Stark County, Ohio, is affirmed.

       Costs assessed to Appellant.

                                          ___________________________________

                                          ___________________________________

                                          ___________________________________

                                                             JUDGES