Court Opinion

ID: 9927272
Source: CourtListenerOpinion
Date Created: 2024-01-26 17:08:57.224132+00
Date Added: 2024-06-11T09:24:12.298379
License: Public Domain

[Cite as Iron Horse Bar & Grill, L.L.C. v. GGJ Triune, PLL, 2024-Ohio-284.]

                            IN THE COURT OF APPEALS OF OHIO
                                SIXTH APPELLATE DISTRICT
                                    OTTAWA COUNTY

The Iron Horse Bar and Grill, LLC                         Court of Appeals No. OT-23-002

        Appellant                                         Trial Court No. 20CV328

v.

GGJ Triune, PLL                                           DECISION AND JUDGMENT

        Appellee                                          Decided: January 26, 2024

                                                 *****

        Mark M. Mockensturm, Brandon Rehkopf, Kevin C. Urtz, and
        Blanca N. Wheeler, for appellant.

        Henry Schaefer, for appellee.

                                                 *****

        SULEK, J.

        {¶ 1} Appellant The Iron Horse Bar and Grill, LLC (“Iron Horse”), appeals the

judgment of the Ottawa County Court of Common Pleas, following a bench trial, which

awarded judgment in favor of appellee GGJ Triune, PLL (“GGJ”), on Iron Horse’s claim

for breach of contract. Because the trial court’s finding that GGJ did not breach the
contract is against the manifest weight of the evidence, the trial court’s judgment is

reversed.

                        I. Factual Background and Procedural History

       {¶ 2} On March 1, 2013, Iron Horse entered into a lease agreement with GGJ to

lease property in Ottawa County, Ohio, on which Iron Horse would operate a restaurant.

In recognition that the property needed substantial renovations before it could be used,

the lease provided that the monthly rent of $1,800.00 would be waived for the first three

months.

       {¶ 3} Due to the extent of the renovations and the difficulty of obtaining the

necessary permits from the county, Iron Horse was not prepared to open after the initial

three months. Iron Horse, however, continued to work on the property and continued to

not pay rent.

       {¶ 4} In October 2013, GGJ inquired about Iron Horse’s progress. The parties

dispute whether Iron Horse responded that it needed additional financing to complete the

renovations. But in either event, on October 22, 2013, Garry Miller, the owner of GGJ,

personally loaned $30,000.00 to Iron Horse. The promissory note listed Iron Horse’s

restaurant equipment as collateral for the loan.

       {¶ 5} Subsequently, on or around December 30, 2013, GGJ attempted to lock Iron

Horse out of the premises. The police were called, and Iron Horse was able to remain on

the property. Sometime in January or February 2014, GGJ then posted a Notice to

2.
Vacate the Premises for “failure to pay rent” and “continued occupation of premises

without lease.” Iron Horse never opened for business. On February 27, 2014, Iron Horse

formally returned the premises to GGJ without ever having made any rent payments.

      {¶ 6} On October 14, 2020, Iron Horse filed the complaint against GGJ for breach

of contract. The matter proceeded to a bench trial on May 16, 2022.

      {¶ 7} At the trial, John Shepler, one of the owners of Iron Horse, testified. Shepler

stated that he formed Iron Horse with Tami Habel as a project for him to work on in his

retirement. In preparation for opening, Iron Horse purchased $30,000 worth of restaurant

equipment from a recently closed restaurant and entered into a lease agreement with GGJ.

Several terms of the lease agreement are relevant here:

             3. Rent.

             The monthly rental for the term of the original lease shall be One

      Thousand Eight Hundred Dollars ($1,800.00) per month, a rate of four

      dollars fifty cents ($4.50) per square foot. All monthly rentals shall be

      payable on the first day of each month, and in the event this lease

      commences in the middle of the month, the first payment shall be pro-rated

      for that portion of the first month. * * * The rent payment for the first three

      months of the initial lease term shall be waived so that Lessee may

      construct the interior of the building for their restaurant needs. * * *

             ***

3.
            17. Default.

            In the event Lessee shall default in the payment of the monthly

     rental as provided herein and failure of Lessee to cure such default within

     Fifteen (15) days, shall at the option of Lessor, work as a forfeiture of this

     lease, or Lessor may enforce performance of any manner provided by law,

     and Lessor’s agent or attorney shall have the right without further notice or

     demand to re-enter and remove all persons from Lessor’s property without

     prejudice to any remedies for arrears of rent or breach of covenant, or

     Lessor’s agent or attorney may resume possession of the property and relet

     the same for the remainder of the term at the best rental such agent or

     attorney can obtain for the account of Lessee, who shall pay any deficiency,

     and Lessor shall have a lien and security for such rental upon the fixtures

     and equipment belonging to Lessee which are on the leased premises. * * *

            ***

            19. Quiet Enjoyment.

            Lessee, upon paying the rent and performing the covenants and

     agreements of this lease, shall quietly have, hold and enjoy the leased

     premises and all rights granted Lessee in this lease during the term hereof

     and any extensions hereto, if any. * * *

            ***

4.
              24. Complete Agreement.

              This lease contains a complete expression of the agreement between

       the parties and there are no promises, representations or inducements except

       such as are herein provided.

       {¶ 8} Shepler testified on cross-examination that when the lease was signed,

Miller told him that he did not have to pay any rent until three months after Iron Horse

opened. He claimed that Garry Miller “stated in front of witnesses I did not have to pay

rent until after the first three months of opening my business doors” and that “[h]e said it

right then, the day we all signed the lease in the office.”

       {¶ 9} Upon execution of the lease, Iron Horse began renovations on the building.

Shepler testified that GGJ paid for a new roof and a new hot water heater, but Iron Horse

paid for the rest, which included a new gas line to the building, revamped electrical

wiring, and a remodeled kitchen and dining area. He claimed that Iron Horse spent

approximately $90,000.00 on the renovations. According to Shepler, the renovations

went well, but the health department kept coming up with additional things to be done in

order to receive the necessary licenses to open.

       {¶ 10} By October 2013, Miller approached Shepler and asked what needed to be

done to get the restaurant opened. Shepler testified that although he had financing lined

up, Miller volunteered to give him a $30,000.00 loan. Shepler accepted the money and

signed a promissory note listing the restaurant equipment as the collateral.

5.
        {¶ 11} Shepler testified that by December 2013, Iron Horse was just waiting on

the health department. It had replaced all the flooring and had started installing booths.

Shepler and Habel had worked out a menu and had visited suppliers and test-cooked most

of the food. They had identified people that they wanted to hire to run the business and

were ready to begin training them.

        {¶ 12} Shortly before Christmas 2013, Shepler contacted the health department

and spoke with the inspector’s supervisor. Shepler testified that he was able to clarify the

situation with the supervisor and was informed that the licenses were approved and could

be picked up after the holidays.

        {¶ 13} On December 30, 2013, however, several of Miller’s employees began

changing the locks on the doors to the restaurant. The employees’ efforts set off the

alarm and Shepler and the police responded to the building. The police report states that

Shepler never received an eviction notice from GGJ, and he claimed that the eviction was

illegal. After several phone calls were made, the employees left the premises. Shepler

testified that Miller’s employees attempted to change the locks several more times after

that.

        {¶ 14} Sometime in January or February 2014, GGJ posted a “Notice to Vacate

the Premises” on the door of the restaurant, which stated that Iron Horse was being asked

to leave for “Failure to pay rent” and “Continued occupation of premises without lease.”

Shepler testified that the notice was posted shortly before the restaurant was scheduled to

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open. Further, Shepler stated that prior to receiving that notice, no one had asked Iron

Horse to pay any rent.

       {¶ 15} After GGJ attempted to change the locks and sent the notices to vacate,

Iron Horse determined that it was not feasible to open the restaurant. At the end of

February 2014, Iron Horse auctioned off all of the restaurant equipment and returned the

premises to GGJ.

       {¶ 16} Habel, the other owner of Iron Horse, testified next. She stated that once

the lease was signed, she spent almost all of her time at the restaurant, cleaning it and

getting it ready to open. In her mind, the restaurant would have been ready to open by

the end of January or the beginning of February 2014, and that it would have opened but

for all of the attempts to change the locks on the doors. Habel testified that she was

present on at least three occasions where Miller’s employees attempted to “break in” and

change the locks. By the end of February 2014, Habel and Shepler were exhausted and

frustrated and decided to give up on opening the restaurant.

       {¶ 17} GGJ called Garry Miller as its first witness. Miller testified that when the

lease was signed, he gave Iron Horse three months to do the remodeling. When it

became clear that Iron Horse was not going to be able to open on time, Miller gave it

more time, which he left open-ended. Miller estimated that Iron Horse probably needed

an additional three months.

7.
       {¶ 18} In October 2013, Miller approached Shepler to see how things were

coming along. Miller testified that Shepler was distraught and claiming “I can’t do it. I

can’t get it open.” According to Miller, Shepler told him that he could not get a loan

from the bank and did not have the money to open the restaurant. At that point, Miller

offered Shepler the $30,000 loan, and Shepler volunteered the restaurant equipment as

collateral.

       {¶ 19} After the loan in October 2013, Miller did not speak with Shepler. But in

December 2013, Miller became aware that Shepler was going to auction off all of the

restaurant equipment. Miller was afraid that Shepler was going to sell all of the

restaurant equipment, take the money, and walk away. He attempted to contact Shepler,

but Shepler would not respond. Having not heard from Shepler, Miller put a padlock on

the restaurant doors to force Shepler to speak with him. He then received a letter from

Shepler’s lawyer informing him that it was illegal to place the lock on the doors, so

Miller had it removed the next day. Miller stated that he would not have locked Shepler

out of the building if it had not been for the notice about the auction.

       {¶ 20} On cross-examination, Miller was asked about the rent payments:

              Q. * * * So I believe you initially testified that the lease says you

       gave Iron Horse three months rent free to get open; is that accurate?

              ***

              A. Yes.

8.
              Q. And then you testified that it wasn’t open after three months and

       you gave them more time to get her done, I think you said?

              A. Yes.

              Q. And you said it was open ended and you never put a stop date on

       it?

              A. I didn’t, no.

              Q. Okay. And when you say you gave them more time to, to get it

       done, does that mean you didn’t ask for any rent?

              A. No, I didn’t ask for no rent.

              Q. Okay. So as long as Iron Horse was working toward opening,

       you told him not to worry about any rent payments; is that accurate?

              A. That’s correct.

       {¶ 21} Miller then was asked about the eviction notice. Miller admitted that the

reasons listed on the notice to vacate were not correct and he clarified:

              Q. So the Iron Horse had a lease at that time?

              A. Yes.

              Q. * * * So as of, you know, for the month of January 2014, Iron

       Horse wasn’t late on rent?

              A. No. Because they weren’t paying rent.

              Q. But you didn’t ask them for rent?

9.
             A. I didn’t ask them for rent.

             Q. Because they were still working towards open?

             A. Yes.

      {¶ 22} Finally, Miller was asked about whether Iron Horse was in default of the

lease agreement:

             Q. But Iron Horse didn’t owe you rent in January of 2014, did they?

             A. No.

             Q. Okay. So they were not in default at that time, were they?

             A. No.

             Q. Okay.

             A. Because I didn’t ask for it.

             Q. Okay. And on top of that, the -- did you ever send them a notice

      to pay rent?

             A. No.

             Q. And even assuming that Iron Horse, for some reason, decided to

      auction their business equipment sometime between when you loaned it to

      them -- or when you made a loan to them and early January, that wouldn’t

      have breached the lease, would it?

             A. No.

             Q. Okay. It may have breached a separate agreement with you?

10.
              A. Yes.

              Q. But it wouldn’t have been a breach of the lease?

              A. No.

       {¶ 23} Finally, GGJ called Jeffrey Herring as its last witness. Herring testified

that in December 2013, he received notice from one of Miller’s employees that Iron

Horse was advertising an auction to sell all of its restaurant equipment.

       {¶ 24} Thereafter, the parties rested and presented the trial court with their closing

arguments. The court took the matter under advisement.

       {¶ 25} On December 22, 2022, the trial court entered its judgment finding in favor

of GGJ. After setting forth the elements of a breach of contract claim, as well as

statements of the law concerning the parol evidence rule, the trial court reasoned:

              In the present case, the Lease provides, at paragraph 3, for monthly

       rental payments due on the first day of the month with the first three

       payments of the initial rental term being waived (March - May 2013). The

       Lease further provides at paragraph 17, that in the event of default in

       monthly payments by the Lessee and failure of the Lessee to cure the

       default within 15 days, said failure operates as a forfeiture of the lease and

       Lessor would have the right to re-enter the Property and remove persons

       and property from therein. Finally, paragraph 24 of the Lease provides,

       “This lease contains a complete expression [of] the agreement between the

11.
      parties and there are no promises, representation or inducements except as

      are herein provided.”

             The Lease is clear and unambiguous and contains a full integration

      provision. As such, no oral or written modifications are permitted.

      Specifically, further waivers of rent payments after May 2013 are not

      provided for in the Lease and cannot be enforced. Since the Lease provided

      for payments of rent commencing June 2013 and the payments were not

      made, by the terms of the Lease, GGJ was permitted to consider the Lease

      forfeited and re-enter the premises.

                               II. Assignments of Error

      {¶ 26} Iron Horse has timely appealed the trial court’s December 22, 2022

judgment and now asserts three assignments of error for review:

             The Trial Court erred in determining that Appellee did not breach

      the parties’ agreement and its decision was against the manifest weight of

      the evidence.

             The Trial Court erred when it determined the parol evidence rule

      applied to the parties’ conduct months after the execution of the contract.

             The Trial Court erred when it determined that a waiver of rent could

      not be enforced because one was not provided for in the lease.

12.
                                       III. Analysis

       {¶ 27} Iron Horse’s assignments of error all pertain to the interpretation and

enforcement of the contract, thus they will be addressed together.

       {¶ 28} “In an appeal from a civil bench trial, we generally review the trial court’s

judgment under a manifest-weight standard of review.” Bonner v. Delp, 2021-Ohio-

3772, 180 N.E.3d 11, ¶ 38 (6th Dist.), quoting Mike McGarry & Sons, Inc. v. Constr.

Resources One, LLC, 2018-Ohio-528, 107 N.E.3d 91, ¶ 90 (6th Dist.). In so doing, “[w]e

weigh the evidence and all reasonable inferences, consider the credibility of the

witnesses, and determine whether in resolving conflicts in the evidence, the trial court

clearly lost its way and created such a manifest miscarriage of justice that its judgment

must be reversed and a new trial ordered.” Mike McGarry & Sons at ¶ 90, citing Eastley

v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 20. “Judgments

supported by some competent, credible evidence going to all the essential elements of the

case will not be reversed by a reviewing court as being against the manifest weight of the

evidence.” C. E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279, 376 N.E.2d 578

(1978), syllabus.

       {¶ 29} But, where an appeal from a bench trial presents a questions of law, we

review such legal issues de novo. Marshall v. Snider-Blake Business Serv., Inc., 10th

Dist. Franklin No. 21AP-700, 2022-Ohio-1869, ¶ 13, appeal not allowed, 167 Ohio St.3d

1526, 2022-Ohio-3322, 195 N.E.3d 162; Mike McGarry & Sons at ¶ 90. Accordingly,

13.
the trial court’s legal conclusions will be reviewed de novo, while its factual conclusions

will be reviewed under the manifest weight standard.

       {¶ 30} This case involves a claim for a breach of contract. “To establish a breach

of contract, the plaintiff must establish ‘by a preponderance of the evidence that (1) a

contract existed, (2) one party fulfilled his obligations, (3) the other party failed to fulfill

his obligations, and (4) damages resulted from that failure.’” Quest Workforce Solutions,

L.L.C. v. Job1USA, Inc., 2016-Ohio-8380, 75 N.E.3d 1020, ¶ 40 (6th Dist.), quoting

Blake Homes, Ltd. v. FirstEnergy Corp., 173 Ohio App.3d 230, 2007-Ohio-4606, 877

N.E.2d 1041, ¶ 77 (6th Dist.).

       {¶ 31} At issue here are the concepts of modification and waiver of contract terms.

Importantly, “[t]he modification of a contractual term is distinct from the waiver of a

contractual term.” BR Kettering Towne Ctr. L.L.C. v. Golden City Ballroom L.L.C., 2d

Dist. Montgomery No. 26718, 2016-Ohio-5159, ¶ 44. “A modification to a contractual

provision is an agreement by the parties to change or modify the term in question.” Id.

“In contrast, waiver is ‘a voluntary relinquishment of a known right.’” Id., quoting Arnett

v. Bardonaro, 2d Dist. Montgomery No. 25371, 2013-Ohio-1065, ¶ 42; see also Glidden

Co. v. Lumbermans Mut. Cas. Co., 112 Ohio St.3d 470, 2006-Ohio-6553, 861 N.E.2d

109, ¶ 49 (“Waiver is a voluntary relinquishment of a known right and is generally

applicable to all personal rights and privileges, whether contractual, statutory, or

constitutional.”).

14.
        {¶ 32} On the issue of modification, the trial court correctly determined that the

parol evidence rule prevented Iron Horse from demonstrating that the terms of the lease

were orally modified at contract signing when Miller allegedly told Shepler that Iron

Horse did not have to pay rent until three months after it opened.

        {¶ 33} “The parol evidence rule states that ‘absent fraud, mistake or other

invalidating cause, the parties’ final written integration of their agreement may not be

varied, contradicted or supplemented by evidence of prior or contemporaneous oral

agreements, or prior written agreements.’” Galmish v. Cicchini, 90 Ohio St.3d 22, 27,

734 N.E.2d 782 (2000), quoting 11 Williston on Contracts (4 Ed.1999) 569-570, Section

33:4.

        {¶ 34} Here, the terms of the written lease agreement provided only that the rent

would be waived for the first three months, i.e., March, April, and May 2013. The

written agreement waiving rent for those months was not conditioned on Iron Horse

opening for business, and nothing in the lease stated that Iron Horse would not be

required to pay rent until it opened. Even if Miller contemporaneously told Shepler that

rent would not be required until three months after Iron Horse opened, the parol evidence

rule precludes Iron Horse from claiming that the lease was orally modified at that time.

Thus, pursuant to the written terms of the lease, Iron Horse was obligated to begin paying

rent on June 1, 2013.

15.
       {¶ 35} The trial court erred as a matter of law, however, when it determined that

further waivers of rent by GGJ could not be enforced. “A waiver of any of the terms of a

contract may be either by subsequent contract, written or oral, or by the acts and conduct

of the parties.” Ohio Farmers Ins. Co. v. Cochran, 104 Ohio St. 427, 135 N.E. 537

(1922), paragraph three of the syllabus; Checkers Pub, Inc. v. Sofios v. One 49 N., L.L.C.,

2016-Ohio-6963, 71 N.E.3d 731, ¶ 33 (6th Dist.). Sometimes, a contract will contain a

“no oral-modification clause” or an “anti-waiver” provision. The lease in this case did

not contain those terms, but even if it did “no-oral modification and written waiver

provisions, like any other contractual provision, can be waived by the parties.” 3637

Green Rd. Co., Ltd. v. Specialized Component Sales Co., Inc., 2016-Ohio-5324, 69

N.E.3d 1083, ¶ 22 (8th Dist.); USPG Portfolio Six, LLC v. Dick’s Sporting Goods, Inc.,

2023-Ohio-550, 209 N.E.3d 263, ¶ 67 (2d Dist.); 13 Williston on Contracts 39:36 (4th

Ed.) (“The general view is that a party to a written contract can waive a provision of that

contract by conduct despite the existence of a so-called antiwaiver or failure to enforce

clause in the contract.”); Am. Business Invests., Inc. v. Shaeena and Allos, LLC, 2023-

Ohio-739, 210 N.E.3d 651, ¶ 49 (Mayle, J., dissenting). Thus, contrary to the trial

court’s reasoning, nothing in the lease prohibited GGJ from waiving the term requiring

payment of rent.

       {¶ 36} The question, then, is whether GGJ did, in fact, waive Iron Horse’s

obligation to pay rent. Whether a contract term has been waived is generally a question

16.
of fact. Cochran at paragraph five of the syllabus; Eureka Multifamily Group v. Terrell,

6th Dist. Lucas No. L-14-1152, 2015-Ohio-1861, ¶ 13. “A party asserting waiver must

prove it by establishing a clear, unequivocal, decisive act by the other party,

demonstrating the intent to waive.” Mike McGarry & Sons, 2018-Ohio-528, 107 N.E.3d

91, at ¶ 103; White Co. v. Canton Transp. Co., 131 Ohio St. 190, 2 N.E.2d 501 (1936),

paragraph four of the syllabus.

       {¶ 37} Here, Miller’s testimony on cross-examination established his clear and

unequivocal intent to waive the payment of rent. Miller testified that as long as Iron

Horse was working towards opening it should not worry about making any rent

payments, that GGJ did not request any rent payments, and that no rent payments were

due in January 2014 when GGJ attempted to lock Iron Horse out of the property.

Furthermore, there is no evidence in the record that would demonstrate that GGJ did not

waive the payment of rent through January 2014. Thus, the trial court’s finding that Iron

Horse breached the lease by failing to make rent payments, thereby entitling GGJ to re-

enter the premises, is against the manifest weight of the evidence.

       {¶ 38} Applying this conclusion to the elements of a claim for breach of contract

in this case, the evidence demonstrates that a contract existed, Iron Horse fulfilled its

obligations under the contract to the extent that those obligations were not waived, and

GGJ failed to fulfill its obligation under paragraph 19 of the contract that Iron Horse

“shall quietly have, hold and enjoy the leased premises and all rights granted Lessee in

17.
this lease during the term hereof and any extensions hereto” when it attempted to re-enter

the premises and lock out Iron Horse.

       {¶ 39} The remaining issue, then, is whether and to what extent Iron Horse

suffered damages from GGJ’s breach of the lease agreement. The trial court did not

reach this issue in its judgment and, as a reviewing court, this court declines to usurp the

trial court’s role by considering that issue for the first time on appeal. Birr v. Birr, 2012-

Ohio-187, 969 N.E.2d 312, ¶ 52 (6th Dist.), citing Murphy v. Reynoldsburg, 65 Ohio

St.3d 356, 360, 604 N.E.2d 138 (1992).

       {¶ 40} Because the trial court erred when it determined that GGJ could not waive

the payment of rent, and because the evidence incontrovertibly demonstrates that GGJ in

fact did waive the payment of rent, the trial court’s judgment in favor of GGJ on Iron

Horse’s claim for breach of contract is against the manifest weight of the evidence.

Accordingly, Iron Horse’s assignments of error are well-taken.

                                       IV. Conclusion

       {¶ 41} For the foregoing reasons, the judgment of the Ottawa County Court of

Common Pleas is reversed. This matter is remanded to the trial court for consideration of

the issue of damages on Iron Horse’s breach of contract claim. GGJ is ordered to pay the

costs of this appeal pursuant to App.R. 24.

                                                                          Judgment reversed,
                                                                              and remanded.

18.
                                                       The Iron Horse Bar and Grill, LLC
                                                                     v. GGJ Triune, PLL
                                                                             OT-23-002

       A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.

Christine E. Mayle, J.                         ____________________________
                                                       JUDGE
Myron C. Duhart, J.
                                               ____________________________
Charles E. Sulek, P.J.                                 JUDGE
CONCUR.
                                               ____________________________
                                                       JUDGE

       This decision is subject to further editing by the Supreme Court of
  Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
       version are advised to visit the Ohio Supreme Court’s web site at:
                http://www.supremecourt.ohio.gov/ROD/docs/.

19.