Court Opinion

ID: 4563541
Source: CourtListenerOpinion
Date Created: 2020-09-08 15:10:08.632335+00
Date Added: 2024-06-11T12:20:38.501444
License: Public Domain

[Cite as Zeerco L.L.C. v. Zayed, 2020-Ohio-4347.]

STATE OF OHIO                    )                       IN THE COURT OF APPEALS
                                 )ss:                    NINTH JUDICIAL DISTRICT
COUNTY OF LORAIN                 )

ZEERCO, LLC                                              C.A. No.    19CA011589

        Appellee

        v.                                               APPEAL FROM JUDGMENT
                                                         ENTERED IN THE
ELIAN ZAYED                                              ELYRIA MUNICIPAL COURT
                                                         COUNTY OF LORAIN, OHIO
        Appellant                                        CASE No.   2016CVE02832

                                 DECISION AND JOURNAL ENTRY

Dated: September 8, 2020

        CARR, Judge.

        {¶1}     Appellant, Elian Zayed, appeals the judgment of the Elyria Municipal Court. This

Court affirms.

                                                    I.

        {¶2}     This matter arises out of two failed lease agreements involving rental units in

Elyria, Ohio. In April 2016, Zayed entered into separate leases with Zeerco, LLC (“Zeerco”),

involving two commercial units in a building located on North Ridge Road. Both leases had an

effective date of April 1, 2016, and ended on December 31, 2018. Shortly after entering into the

lease agreements, Zayed arrived at the premises to find several inches of standing water in one of

the rental units due to recent rains. Zayed also found signs of water seepage into the second rental

unit. Zayed contacted a plumber to get an estimate on addressing the issue. The plumber indicated

that a drain tile and the parking lot would need to be replaced. Zayed found that the cost of such
                                                2

repairs was unreasonable for a rental unit. Zeerco disputed that such significant repairs were

necessary to address the issue.

       {¶3}    When Zayed and Zeerco could not reach an agreement on how to correct the

drainage problem, Zayed approached Zeerco about purchasing the building. The parties signed an

amended lease agreement that granted Zayed the right to purchase the building for a cash payment

of $85,000 by December 31, 2016. The amended lease provided that the terms of the prior lease

agreements would remain in place if Zayed did not go forward with the purchase. Upon receiving

several professional consultations and learning the price that Zeerco had paid to acquire the

property, Zayed became dissatisfied with the terms of the amendment and attempted to renegotiate

the terms of the purchase option. Zeerco declined to renegotiate. At that time, Zayed returned

possession of the property to Zeerco.

       {¶4}    Zeerco filed a complaint alleging that Zayed had breached the terms of the lease

agreements by failing to make the required rent payments. Zeerco further alleged that Zayed

significantly damaged the rental units prior to returning possession. Zeerco sought damages up to

the jurisdiction limit of $15,000. Zayed filed an answer generally denying the claims and asserting

a number of defenses. Zayed also filed a counterclaim alleging abuse of process. Zeerco denied

the allegations in the counterclaim. The matter proceeded to trial before a magistrate. On March

1, 2018, the magistrate issued a decision awarding Zeerco $15,000 in damages, plus interest.

Zayed filed a timely objection to the magistrate’s decision, arguing that the magistrate failed to

consider R.C. 5301.11 in rendering its decision. The trial court issued a journal entry overruling

Zayed’s objection and adopting the magistrate’s decision.
                                                  3

       {¶5}    This Court dismissed Zayed’s initial appeal on the basis that his counterclaim was

still pending before the trial court. After voluntarily dismissing the counterclaim, Zayed filed a

second notice of appeal. Now before this Court, Zayed raises three assignments of error.

                                                 II.

                                  ASSIGNMENT OF ERROR I

       THE TRIAL COURT ERRED IN ITS INTERPRETATION OF [R.C.] 5301.11,
       AND ITS APPLICATION TO THE FACTS PRESENTED IN THIS CASE.

                                 ASSIGNMENT OF ERROR II

       THE TRIAL COURT’S FINDING THAT 2 AND 4 INCHES OF STANDING
       WATER, INSIDE THE PREMISES TO BE LEASED, DID NOT MAKE THE
       PREMISES UNFIT TO OCCUPY WAS AN ABUSE OF DISCRETION.

                                 ASSIGNMENT OF ERROR III

       THE TRIAL COURT’S DETERMINATION THAT THE APPELLANT’S
       ATTEMPT TO NEGOTIATE A PURCHASE OF THE PROPETY, “BELIES HIS
       CLAIM THAT THE PROPERTY WAS ‘UNFIT FOR OCCUPANCY’” WAS AN
       ABUSE OF DISCRETION.

       {¶6}    In his first assignment of error, Zayed contends that the trial court erred in its

interpretation of R.C. 5301.11 and its application to the facts presented in this case. In his second

and third assignments of error, Zayed maintains that several of the trial court’s findings constituted

an abuse of discretion.

       {¶7}    This Court generally reviews a trial court’s action in regard to a magistrate’s

decision for an abuse of discretion. Fields v. Cloyd, 9th Dist. Summit No. 24150, 2008-Ohio-

5232, ¶ 9. “In so doing, we consider the trial court’s action with reference to the nature of the

underlying matter.” Tabatabai v. Tabatabai, 9th Dist. Medina No. 08CA0049-M, 2009-Ohio-

3139, ¶ 18. When the issue presented for appellate review presents purely a question of law, this

Court employs a de novo standard of review. Lucas v. Ford Motor Co., 9th Dist. Summit No.

28622, 2018-Ohio-3765, ¶ 16.
                                                  4

       {¶8}    After the trial in this matter, the magistrate issued a decision finding in favor of

Zeerco on its complaint. In reaching its decision, the magistrate noted that both leases contained

clauses specifying that Zayed would be responsible for “all the work that the premises needs * * *

[and] all repairs to the building.” (Emphasis omitted.) The magistrate rejected several defenses

offered by Zayed as to why he was not required to make the rent payments. Regarding the drainage

issues, the magistrate found it significant that the amendment to the leases, which gave Zayed an

option to buy the property, specifically stated that the original lease agreements would remain in

place if the sale did not go forward. The magistrate stressed that by signing the amendment, Zayed

effectively ratified the prior leases despite having an appreciation for the drainage issues. With

respect to damages, the magistrate determined that Zayed owed back rent pursuant to both lease

agreements. The magistrate further found that Zayed was in the midst of a drastic remodeling of

the rental units at the time he returned possession, resulting in $12,600 in damages.

Acknowledging the monetary limits of the municipal court’s jurisdiction, the magistrate ordered a

total of $15,000 in damages, plus interest.

       {¶9}    Zayed filed a timely objection to the magistrate’s decision. The sole objection

raised by Zayed was that the trial court failed to consider R.C. 5301.11, a statute that relieves a

tenant of the responsibility to pay rent under certain circumstances. Zayed maintained that the

trial court’s failure to consider R.C. 5301.11 resulted in an erroneous finding of liability.

       {¶10} On June 1, 2019, the trial court issued a journal entry overruling Zayed’s objection

and adopting the magistrate’s decision. With respect to the application of R.C. 5301.11, the trial

court determined that the statute was only applicable under circumstances where a property was

destroyed, or nearly destroyed, due to an unexpected or unusual event. In concluding that the

statute was not applicable in this case, the trial court observed that “the presence of between two
                                                 5

and four inches of standing water would hardly rise to this standard in the absence of evidence

demonstrating that it could not be remedied.” The trial court further noted that instead of

immediately surrendering possession of the property pursuant to the statute, Zayed sought to

purchase the property from Zeerco. The trial court found Zayed’s attempt to purchase the property

“belie[d] his claim that the property was ‘unfit for occupancy.’”

       {¶11} The crux of Zayed’s argument on appeal is that the trial court erred in concluding

that R.C. 5301.11 did not apply to the facts of this case. R.C. 5301.11 states as follows:

       The lessee of a building which, without fault or neglect on his part, is destroyed or
       so injured as to be unfit for occupancy, is not liable to pay rent to the lessor or
       owner thereof, after such destruction or injury, unless otherwise expressly provided
       by written agreement or covenant. The lessee thereupon must surrender possession
       of such premises.

       {¶12} This Court has generally recognized that “R.C. 5301.11 was enacted to relieve a

lessee from such continuing obligation to pay rent on premises which are not habitable.” Capp v.

The Dorrell Trust, 9th Dist. Lorain No. 3362, 1982 WL 2825, *2 (Nov. 10, 1982). In Hilliard v.

The New York & Cleveland Gas Coal Co., 41 Ohio St. 662, 668-669 (1885), the Supreme Court

of Ohio examined a predecessor statute to R.C. 5301.11, former R.S. 4113. Former R.S. 4113

marked a departure from the common law rule that a tenant was liable for rent even when

unforeseen destruction occurred. Id. In Hillard, the Supreme Court concluded that a tenant was

relieved of the duty to pay rent under the statute when “an expected and unusual action of the

elements or of human forces” occurs and results in “a total destruction of the demised premises or

an injury thereto only short of a total destruction[.]” Hilliard at 669. The Supreme Court stressed

that the statute did not apply to “gradual decay” that resulted from “the ordinary action of the

elements * * * [or] the ordinary action of human agencies[.]” Id. A building is that is rendered

merely less desirable for business purposes is not considered “unfit for occupancy” for the
                                                 6

purposes of seeking relief from the obligation to pay rent. See Grau v. Longworth, 21 Ohio Cir. Dec.
174, 1909 WL 1142 (Jan. 23, 1909).

       {¶13} Here, the trial court properly concluded that R.C. 5301.11 is not applicable under

these circumstances. Both leases at issue in this case contained provisions stipulating that Zayed

would be responsible for any repairs needed on the premises. Shortly after entering into the lease

agreements, Zayed arrived at the premises and found 2 to 4 inches of water in one rental unit and

water seepage in the second rental unit. Significantly, Zayed did not return possession of the

property after learning of the drainage issues and instead contacted a plumber to get an estimate

on remedying the problem. When Zayed found the cost of correcting the drainage issue to be

prohibitive for a rental situation, he negotiated an option to purchase the building. Zayed also

moved forward with his plans for remodeling. It was only after he unsuccessfully attempted to

renegotiate the purchase option that he returned possession of the rental units. Even assuming

arguendo that R.C. 5301.11 would be applicable under circumstances where an unexpected or

unforeseen event rendered both units untenantable for the intended purpose of the leases, such

circumstances did not occur in this case. The drainage issues here were not so significant as to

render the units unfit for occupancy. Furthermore, there was no dispute that the issues could be

remedied, although the parties could not agree on the cost of doing so. As this case does not

involve a scenario where the two rental units were “destroyed or so injured as to be unfit for

occupancy,” the trial court did not err in concluding that R.C. 5301.11 was not applicable. R.C.

5301.11.

       {¶14} To the extent that Zayed contends in his second and third assignments of error that

the trial court’s conclusion was predicated on erroneous factual findings, this Court is mindful that

Civ.R. 53(D)(3)(b)(ii) requires a party filing objections to a magistrate’s decision to “be specific
                                                 7

and state with particularity all grounds for objection.” Civ.R. 53(D)(3)(b)(iv) provides that “a

party shall not assign as error on appeal the court’s adoption of any factual finding or legal

conclusion * * * unless the party has objected to that finding or conclusion as required by Civ.R.

53(D)(3)(b).” In resolving Zeerco’s claim that Zayed failed to make the required payments

pursuant to the leases, the magistrate made specific findings regarding the extent of the water

issues in the rental units as well as Zayed’s attempt to purchase the property. Zayed’s sole

objection to the magistrate’s decision was legal in nature, namely that the magistrate failed to

consider R.C. 5301.11. As Zayed did not object to the factual findings below, this Court is

precluded from addressing any challenges to said findings on appeal. See generally Heron Point

Condominium Unit Owner’s Assoc. v. E.R. Miller, LTD, 9th Dist. Summit Nos 25861, 25863,

25998, 2012-Ohio-2171, ¶ 24.

       {¶15} Zayed’s first, second, and third assignments of error are overruled.

                                                III.

       {¶16} Zayed’s assignments of error are overruled. The judgment of the Elyria Municipal

Court is affirmed.

                                                                               Judgment affirmed.

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Elyria Municipal

Court, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of

this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period
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for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to

mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the

docket, pursuant to App.R. 30.

       Costs taxed to Appellant.

                                                     DONNA J. CARR
                                                     FOR THE COURT

CALLAHAN, P. J.
TEODOSIO, J.
CONCUR.

APPEARANCES:

DAVID A. FREEBURG, Attorney at Law, for Appellant.

NATE N. MALEK, Attorney at Law, for Appellee.