COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 66712 : PARKBROOK DEVELOPMENT CORPORATION : : : JOURNAL ENTRY Plaintiff-Appellant : : and -vs- : : OPINION NORTHERN REFLECTIONS : : : Defendant-Appellee : : : DATE OF ANNOUNCEMENT OF DECISION: APRIL 27, 1995 CHARACTER OF PROCEEDING: Civil appeal from Cleveland Municipal Court Case No. 93-CVG-19209 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellant: For Defendant-Appellee: ROBERT R. KRACHT, ESQ. THOMAS A. YOUNG, ESQ. SCOTT H. KAHN, ESQ. Porter, Wright, Morris McIntyre, Kahn & Kruse & Arthur Galleria and Towers at Erieview 41 South High Street 1301 East Ninth Street, #1200 Columbus, Ohio 43215 Cleveland, Ohio 44114-1824 - 2 - HARPER, P.J.: Plaintiff-appellant, Parkbrook Development Corporation ("Parkbrook"), appeals from the judgment entered in favor of defendant-appellee, Northern Reflections, Inc. ("Northern"), by the Cleveland Municipal Court on its forcible entry and detainer complaint. Parkbrook submits that the trial court abused its discretion in allowing the introduction of parol evidence at trial and erred thereafter in reforming a commercial lease entered into by the parties. The Richman Brothers Company ("Richman"), a wholly-owned subsidiary of the Woolworth Corporation ("Woolworth"), owned real estate located at 1600 East 55th Street, Cleveland, Ohio ("the owned property") in 1992. Richman also leased real estate which was contiguous to and immediately east of the owned property ("the leased property"). A large commercial building measuring approximately 600,000 square feet existed on the owned and leased properties ("the building"). On December 22, 1992, Richman and 1600 Corporation ("1600 Corp.") entered into a contract ("the contract") for the sale of the owned property with 1600 Corp. also becoming the assignee to the leased property. The contract provided further at paragraph five in pertinent part: "*** "Purchaser and Northern Reflections, Inc. ("Northern") shall execute a lease agreement ("Northern Lease") - 3 - which has been prepared by Richman, to be delivered to Richman at Close of Escrow. The Northern Lease shall be between the Purchaser, as landlord and Northern, as tenant and will identify approximately 200,000 square feet of space in the Leased Premises. The rental rate shall be $2.00 per square foot and the term shall be from the Close of Escrow through and including January 31, 1994. Northern shall also have two (2) one (1) year options for the same base rental price of $2.00 per square foot per year. *** The landlord under the Northern Lease shall supply normal heat, water and electric for overhead lights between business hours (8:00 a.m.-6:00 p.m.) 9:00 p.m. from October through January in each lease year on a five week day basis. Any increases in general operating expenses, taxes and insurance over the first year of the Northern Lease (Base Year) will be additional rent on a prorata basis to be paid by Northern. ***" (Emphasis added.) 1600 Corp. and Northern, another wholly-owned subsidiary of Woolworth, executed a lease ("the lease") on December 22, 1992 for approximately 200,000 square feet of the building. Northern is in the women's retail clothing business and it planned to use the leased space for its warehouse/distribution center. The lease contained the following language at paragraphs four and five in relevant part: "4. RENEWAL "(a) First Option. If Tenant is not in default of this Lease, Tenant is herewith given a first option to renew the term of this Lease for an additional period of one (1) year commencing upon the expiration of the original term hereof under the same terms and conditions as are set forth herein for the original term. *** It is further understood, that Tenant shall pay its pro-rata share of increases over the base year for H.V.A.C., real estate taxes, insurance and utilities. "*** "5. ADDITIONAL RENT - UTILITY, TAXES. - 4 - (a) Utilities. The Tenant shall pay for all utilities for the Demised Premises. Utilities as referred to in this paragraph 5 are electricity, heat, gas, water, sewer and other utilities or services used on the Demised Premises, including telephone service. ***" (Emphasis added.) John Tascione, an attorney and the Director of Leasing for Woolworth, negotiated the terms of the contract and the lease on behalf of Richman whereas Gary Harris negotiated on behalf of 1600 Corp. Both documents were drafted by Woolworth's corporate real estate attorney, Rene Wilmot. Northern was not a party to the contract and there are no signatures from any officer of Northern affixed thereto. Following the consummation of the purchase of the owned property by 1600 Corp. and Northern's execution of the lease, 1600 Corp. assigned its interest in the lease to Parkbrook on March 13, 1993. Parkbrook forwarded a letter dated March 29, 1993 to Northern in which Northern was notified of the assignment. The letter moreover advised Northern that effective April 1, 1993, all lease remittances were to be mailed to Parkbrook. Notwithstanding this notice, Northern sent a payment to 1600 Corp. for the month of May, 1993. Not only was the May, 1993 lease payment directed to the inappropriate party, but it was also offset for utilities for the first time. In other words, Northern deducted the cost of utilities from its monthly rental payment. - 5 - Parkbrook, by a certified letter to Tascione dated May 4, 1993, notified Northern once again as to the assignment of the lease. It also advised Northern that it was in default of the lease by offsetting the utilities, therefore, Northern was directed to submit full lease payment for May, 1993. The June, 1993 rental payment was nonetheless forwarded to 1600 Corp. The payment was also once again offset for utilities. Another certified letter was sent to Northern by 1600 Corp. to the attention of Tascione on June 1, 1993. Northern was once again apprised of the assignment and of the default which commenced in May, 1993. On August 5, 1993, Parkbrook sent a letter to Northern with regard to the default in payment under the lease for May through August, 1993. Parkbrook enclosed a three-day Notice to Leave Premises which further demanded for Northern to cure the default under the lease. Tascione admitted that the notice was received, but Northern neither vacated the premises nor cured the alleged default. Parkbrook initiated a forcible entry and detainer action in the trial court on August 20, 1993 pursuant to R.C. 1923.01 et seq. Parkbrook sought to evict Northern from the leased premises for non-payment of rent due under the lease. The action proceeded to trial on November 16, 1993. At the time of trial, Northern was still occupying the leased premises. The primary issue in the case was the identification of the party - 6 - who was responsible for the payment of utilities at the leased property during the original term of the lease. Northern acknowledged that paragraph 5 of the lease specifies that it was responsible for said utilities payments. However, it referred to paragraph 4(a) of the lease and paragraph 5 of the contract at trial arguing that Parkbrook was responsible for the first year's utilities payments. Specifically, paragraph 5 of the contract provides that "[a]ny increases in general operating expenses *** over the first year of the Northern Lease (Base Year) will be additional rent on a pro-rata basis to be paid by Northern." Northern also found support in paragraph 4(a) of the lease wherein it is stated that Northern "shall pay its pro-rata share of increases over the base year for H.V.A.C., real estate taxes, insurance and utilities." Based upon the foregoing, Northern submitted to the court that the lease is ambiguous with regard to the payment of utilities during the initial term of the lease. It argued that paragraph 5 of the contract and paragraph 4(a) of the lease expressed the true intent of the parties, i.e., Parkbrook would pay the first year's utilities payments. It also argued that paragraph 5 of the lease was a drafting mistake which called for the reformation of the lease to conform to the true intent of the parties. Over objection of Parkbrook's counsel, Northern was permitted to introduce parol evidence through the contract and the testimony of Tascione regarding the intent of the parties as - 7 - to the issue of payment of utilities. Tascione's testimony pertained to both the "true intent" of the parties and the "drafting mistake" in paragraph 5 of the lease. Tascione testified that the landlord agreed to be responsible for the payment of utilities especially since there was no means to meter the utilities fed to 200,000 square feet of the 600,000 square feet structure. The trial court requested that both parties file post-trial briefs. The court entered judgment in favor of Northern on November 10, 1993 without opinion. This appeal followed with Parkbrook assigning as error: "I. THE TRIAL COURT ERRED AS A MATTER OF LAW BY ALLOWING THE INTRODUCTION OF PAROL EVIDENCE WHERE THE LEASE WAS DRAFTED BY NORTHERN, WAS UNAMBIGUOUS AND CONTAINED AN INTEGRATION CLAUSE. "II. THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT REFORMED THE LEASE." In its first assignment of error, Parkbrook asserts that the trial court abused its discretion in allowing the introduction of parol evidence. It argues that the lease which was drafted by Northern was unambiguous with regard to payment of utilities and, therefore, parol evidence was inadmissible to counter the express terms of the lease. The paramount objective in construing any written instrument is to ascertain the parties' intent. Contracts should generally be construed so as to give effect to that intention. Skivolocki v. East Ohio Gas Co. (1974), 38 Ohio St.2d 244, paragraph one of - 8 - the syllabus; Employers Liability Assurance Corp. v. Roehm (1919), 99 Ohio St. 343, syllabus. "Where the parties, following negotiations, make mutual promises which thereafter are integrated into an unambiguous written contract, duly signed by them, courts will give effect to the parties' expressed intentions." Aultman Hosp. Assn. v. Community Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 53, citing Henderson-Achert Lithographic Co. v. John Shillito Co. (1901), 64 Ohio St. 236, 252. Parol evidence is generally inadmissible to show the intention of the parties to a lease when the lease is unambiguous and unequivocal. See, Charles A. Burton, Inc. v. Durkee (1952), 158 Ohio St. 131; Selzer v. Turske (1928), 30 Ohio App.15; Rhodes v. Rhodes Industries, Inc. (Mar. 28, 1991), Cuyahoga App. No. 58359, unreported; Fodor v. First National Supermarkets (July 5, 1990), Cuyahoga App. No. 58587, unreported. Such evidence when not contradictory to the terms of a contract is admissible "to illuminate the circumstances under which the contract was executed, and to explain the intent of the parties as reflected in the contract." Fodor, citing Third National Bank of Cincinnati v. Laidlaw (1912), 86 Ohio St. 91. The purpose of the parol evidence rule is to prohibit evidence which is intended to supersede and destroy the clear intention of a written instrument's provision, not to forbid extrinsic evidence in general. Owens v. Baker (1933), 48 Ohio App. 347; see, Schmuck - 9 - v. Baldassarre (Aug. 1, 1991), Cuyahoga App. No. 58746, unreported. Consequently, "*** the parol evidence rule precludes the introduction of evidence of conversations or declarations which occur prior to or contemporaneous with a written contract and which attempt to vary or contradict terms contained in the writing ***." Ameritrust Co. v. Murray (1984), 20 Ohio App.3d 333, 335. In the within case, the lease contained an integration clause which limited Parkbrook's and Northern's agreement to the written lease. Though the contract between 1600 Corp. and Richman referenced the lease, the lease was strictly limited to the terms contained in the lease. Moreover, Northern was not a party to the contract nor did any officer of the corporation affix his or her signature to the instrument. Paragraph 5 of the contract thus had no bearing on the lease, and any ambiguity between this paragraph and any portion of the lease could not be used to show an ambiguity(ies) in the lease. Cf. Home Sav. Ass'n of Kansas City v. State Bank (N.D. Ill. 1991), 763 F.Supp. 292 (two documents will be considered as one when executed at the same time by the same parties). However, this court finds an ambiguity in the lease itself without the benefit of the contract. Paragraph 4(a) of the lease addresses Northern's right to renew the lease following the initial lease period of January 1, 1993 to January 31, 1994. The renewal provision states that Northern shall pay its pro-rata share of increases over the initial lease period for H.V.A.C. and - 10 - utilities. Our interpretation of this provision leads us to conclude that some other party was paying for utilities or a part thereof for the initial lease period. Otherwise, there would be no need to state that Northern was responsible for its pro-rata share of increases after the first year for utilities. Paragraph 5 of the lease on the other hand specifies that Northern is to pay for all utilities without reference to the initial lease period or any period of renewal. We acknowledge that paragraph 5 of the lease is explicit; however, neither the trial court nor this court can ignore paragraph 4(a) of the lease. Accordingly, the lease is ambiguous with regard to the party who is responsible for the payment of utilities during the initial period of the lease. The trial court did not abuse its discretion in allowing Tascione to offer testimony with regard to the intention of the parties on this issue. Charles A. Burton, Inc.; Aultman. With regard to Parkbrook's proposition that the trial court erred in reforming the lease, the lease expired on January 31, 1994 and any reformation expired with it. Northern filed a motion with this court to dismiss Parkbrook's appeal based upon this expiration. Though Parkbrook's second assignment of error is rendered moot by the expiration, we do not find that there are grounds to dismiss the appeal. See Motion No. 52109, released December 2, 1994. Parkbrook requested not only that Northern be evicted from the premises, but also requested restitution and - 11 - costs of the action. If we dismissed this appeal without reviewing Parkbrook's first assignment of error under these circumstances, we may have denied Parkbrook its right to recover from Northern. Judgment affirmed. - 12 - It is ordered that appellee recover of appellant its costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Cleveland Municipal Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. DONALD C. NUGENT, J., AND BLANCHE KRUPANSKY, J., CONCURS. SARA J. HARPER PRESIDING JUDGE SITTING BY ASSIGNMENT: Judge Blanche Krupansky, retired from the Eighth District Court of Appeals. N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. .