COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 66936 U.S.A. PARKING SYSTEMS, INC. : : : PLAINTIFF-APPELLANT : JOURNAL ENTRY : v. : AND : PENN-LILLIS CORP. : OPINION : : DEFENDANT-APPELLEE : DATE OF ANNOUNCEMENT OF DECISION: OCTOBER 12, 1995 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court, No. CV-251814. JUDGMENT: REVERSED AND REMANDED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: Gus Frangos, Esq. 1300 East 9th Street 900 Bond Court Building Cleveland, OH 44114 For Defendant-Appellee: Eric Larson Zalud, Esq. Benesch Friedlander, Coplan & Aronoff 2300 BP America Building 200 Public Square Cleveland, OH 44114-2378 -2- DAVID T. MATIA, P.J.: U.S.A. Parking Systems, Inc. ("U.S.A."), plaintiff-appellant, appeals the decision of the Cuyahoga County Court of Common Pleas granting Penn-Lillis Corp.'s ("Penn-Lillis"), defendant- appellee's, motion for summary judgment. Appellant raises three assignments of error. This court, finding error, reverses the decision of the trial court and remands this case back for further proceedings. I. STATEMENT OF FACTS Penn-Lillis, defendant-appellee, is the partial owner of a building located at 211 High Street, Cleveland, Ohio. Al Piten, d.b.a. Public Square Auto Care, Inc. ("Piten"), was and is a tenant in the building who operates a parking garage on the ground floor. Piten, who is also a minor shareholder in appellee, was approximately $16,800 in rent arrears on his monthly rent payments. On September 15, 1992, Penn-Lillis, defendant-appellee, filed a complaint for forcible entry and detainer against Piten, a month- to-month tenant, in Cleveland Municipal Court. After Piten failed to appear at the hearing, appellee's eviction order was granted. However, a subsequent motion to vacate the eviction order filed by Piten was granted and a second hearing date on the forcible entry and detainer claim was scheduled for November 20, 1992. On November 6, 1992, even though appellee still had an existing month-to-month lease with Piten, appellee entered into a five year lease agreement with U.S.A., plaintiff-appellant, for the ground -3- floor and basement of the building on 211 High Street. An addendum to the lease provided in pertinent part: 33. The Commencement Date of this Lease is the date possession of the Premises is given to Tenant, free of the existing tenant and occupant. Upon execution hereof, Landlord shall with all due diligence proceed to evict the present tenant, or obtain its voluntary vacation. At the previously scheduled hearing between Penn-Lillis, defendant-appellee, and Piten, the parties agreed to a settlement of their dispute. On November 25, 1992, the parties executed an "Agreed Judgment Entry" which allowed Piten to pay the back rent in exchange for a new five year lease agreement for the same property. Upon learning of the "Agreed Judgment Entry", U.S.A., plaintiff-appellant, filed a complaint against Penn-Lillis, defendant-appellee, for breach of their lease agreement, tortious interference and fraud. Three days later on May 13, 1993, Piten filed an action against appellee seeking an injunctive order preventing appellee from selling the building before executing their lease and ordering the implementation of their "Agreed Judgment Entry," i.e., a lease for five years with a five year option to renew. The two cases were subsequently consolidated. On October 8, 1993 a hearing was held on Piten's claim for injunctive relief. While receiving notice of the hearing, U.S.A., defendant-appellant, did not attend. Penn-Lillis, defendant-appellee, argued the "Agreed Judgment Entry" was void due to duress and coercion. Appellee argued it was forced into -4- the settlement because: 1) it could not meet its impending obligations for the building without obtaining Piten's back rent and 2) Piten could have tied up the "backbreaking" arrearages in lengthy appeals while maintaining occupancy of the building. Nevertheless, on October 12, 1993, the Court found in favor of Piten and granted a permanent injunction against appellee from selling the building until Piten was issued a lease as the parties previously agreed in their "Agreed Judgment Entry." On January 7, 1994, Penn-Lillis, defendant-appellee, filed a motion for summary judgment as to U.S.A.'s, plaintiff- appellant's, claims of breach of their lease agreement, tortious interference and fraud. Appellee argued the condition precedent to the contingency lease entered into with U.S.A., plaintiff- appellant, was the eviction of Piten. Since the condition could not be fulfilled due to the court's order, the contingency lease agreement was null and void. On January 18, 1994, U.S.A., plaintiff-appellant, filed a motion for summary judgment and replied to appellee's motion. Appellant argued appellee did not exercise due diligence in evicting Piten as required by their lease agreement. Additionally, appellant argued appellee's voluntary settlement with Piten cannot be the basis for appellee's defense of impossibility. While appellant conceded Piten was entitled to remain a tenant on the premises due to the court's previous order, appellant argued that this does not extinguish its right to damages against appellee for breach of their agreement. -5- On February 7, 1994, a hearing was held on Piten's motion to show cause to determine why the prior order of specific performance had not yet been executed. U.S.A., plaintiff- appellant, was in attendance. The trial court explained to appellant's counsel that a hearing had already taken place and the court found there had been an existing lease between appellee and Piten at the time the lease with U.S.A., plaintiff-appellant, was entered into. Since there was an ongoing lease with Piten, the lease entered into between appellant and appellee was a nullity and had no effect. Appellant filed a motion to reconsider the court's pronouncements of February 7, 1994. This motion was denied. Appellant filed a request for findings of fact and conclusions of law which was also denied. On February 16, 1994, the trial court denied appellant's motion for summary judgment and granted appellee's similar motion. On appeal, this court dismissed the case for lack of a final appealable order. Subsequently, all claims and cross-claims were dismissed with prejudice. After granting U.S.A.'s, plaintiff-appellant's, motion for reinstatement, this appeal is now properly before this court. II. FIRST AND SECOND ASSIGNMENTS OF ERROR As appellant's first and second assignments of error contain similar issues of law and fact, this court will consider them concurrently. I. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT AGAINST PLAINTIFF- -6- APPELLANT USA PARKING SYSTEMS, INC. ("APPELLANT USA"). II. THE TRIAL COURT APPLIED INCORRECT LEGAL STANDARDS IN GRANTING SUMMARY JUDGMENT AGAINST APPELLANT USA. A. ISSUE RAISED: WHETHER THE TRIAL COURT ERRED IN GRANTING DEFENDANT-APPELLEE'S MOTION FOR SUMMARY JUDGMENT U.S.A.'s, plaintiff-appellant's, first and second assignments of error concern the trial court's granting of Penn-Lillis', defendant-appellee's, motion for summary judgment as it applies to appellant's claims of breach of contract and fraud. Specifically, appellant argues the trial court erred as a matter of law in declaring appellant's lease with appellee a nullity due to the pre-existing lease agreement between appellee and Piten. Even if it is not entitled to possession, appellant argues the lease agreement between appellee and Piten in no way bars appellant from seeking damages. Additionally, appellant argues there are questions of material fact remaining concerning appellant's claims of breach of contract and fraud. Specifically, evidence was presented establishing appellee, instead of using "due diligence" to deliver the subject property to appellant as required by their lease agreement, voluntarily entered into a settlement agreement delivering the property to a third party, Piten. The fact that the court enforced their voluntary settlement calling for the subsequent lease extension to Piten does not relieve appellee of its liability for breach of their prior agreement. -7- Moreover, appellant argues evidence was presented establishing appellee intentionally misrepresented their intentions concerning their lease agreement. The evidence demonstrated appellee used the "second" lease with appellant merely as a "collection tool" to force Piten into paying the back rent due. For the above mentioned reasons, appellant argues the trial court erred in granting summary judgment for appellee. U.S.A.'s, plaintiff-appellant's, first and second assignments of error are well taken. B. STANDARD OF REVIEW: SUMMARY JUDGMENT A court reviewing the granting of summary judgment must follow the standard set forth in Civ.R. 56(C). Stegawski v. Cleveland Anesthesia Group, Inc. (1987), 37 Ohio App.3d 78. Civ.R. 56(C) provides that before summary judgment may be granted, it must be determined that: (1) no genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from such evidence that reasonable minds can come but to one conclusion and, reviewing the evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party. Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327. Summary judgment is a procedural device engineered to expeditiously and economically dispose of legal issues which have no factual foundation. Celotex Corp. v. Catrett (1986), 477 U.S. 317, 327; Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 358. Underpinning this device is a belief that litigation should be -8- promptly terminated whenever there is nothing to try. Norris v. Ohio Std. Oil Co. (1982), 70 Ohio St.2d 1, 2. "Summary judgment must be awarded with caution, resolving doubts and construing evidence against the moving party, and only granted when it appears from the evidentiary material that reasonable minds can reach only an adverse conclusion as to the party opposing the motion." Murphy, supra, quoting, Norris, supra. The key to summary judgment is that there must be no genuine issue as to any material fact. A "material fact" depends upon the substantive law of the claim being litigated. Anderson v. Liberty Lobby, Inc. (1986), 477 U.S. 242, 247-248; Turner v. Turner (1993), 67 Ohio St.3d 337. See, also, Barnes v. University Hospitals of Cleveland (July 21, 1994), Cuyahoga App. No. 66799, unreported. With these principles in mind, we turn our attention to the substantive law of the claims being litigated. C. THE TRIAL COURT ERRED IN GRANTING APPELLEE'S MOTION FOR SUMMARY JUDGMENT. While the trial court did not set forth its findings of fact and conclusions of law, from a review of the transcripts it is apparent the trial court granted appellee's summary judgment based upon the theory that the lease between appellant and appellee was a legal nullity due to the prior arrangement between appellee and Piten. We find this holding, as a matter of law, is in error. -9- A lease is a species of contract and subject to the principles applicable to contracts. Egner v. Egner (1985), 24 Ohio App.3d 171; Sigler-Bach Co. v. Rudolph Wurlitzer Co. (1929), 8 O.L.A. 267. As such, the breach of a contract for the lease of property may give rise to ordinary contract remedies for the injured party. Glyco v. Schultz (1972), 35 Ohio Misc. 25; 289 N.E.2d 919. See R.C. 5321.12. Initially we note there is no dispute the written lease agreement between appellant and appellee complies with the mandates of R.C. 5301.01. Thus, while the pre-existing lease between appellee and Piten provides possessory and/or superior rights to Piten, there still exists a valid contract between appellee and appellant. Under this contract exists various obligations assigned to each party. The party who breaches their obligations may be held liable for damages incurred. See Restatement of Law 2d, Property (1977), 125, Section 4.2. In Mullins v. Brown (1950), 87 Ohio App. 427, a somewhat analogous situation existed. In that case the defendant-lessor leased a portion of his farm to the plaintiff-lessee after he had already leased the entire farm to another individual. The plaintiff-lessee brought an action for breach of a contract lease. The court held if the lessee under the first contract was in possession rightfully under the lease from the lessor and the lessee under the second lease was thereby excluded, the lessor would be in violation of the implied term in the lease that he/she had not done and would not do anything -10- which would interfere with the lessee taking and holding possession. Id. at 435. Moreover, the landlord's inability to dispossess the original lessee did not constitute a defense to plaintiff's claim of breach of contract. Id. After a review of the evidence submitted, we find the trial court erred in granting summary judgment by holding the mere existence of a pre-existing lease bars a subsequent lessee's claim for breach of contract. Whether appellee breached the lease agreement with appellee as well as the determination of damages, if any, are questions of fact best left to the trier of fact. Moreover, while we agree with the trial court in excluding the settlement letter appellant presented as proof of fraudulent intent, the issue of fraud still remains for the trier of fact to determine. See Evid.R. 408; Waiter v. Marion Production Credit Assoc. (1987), 42 Ohio App.3d 215. U.S.A.'s, plaintiff-appellant's, first and second assignment of error are well taken. III. THIRD ASSIGNMENT OF ERROR U.S.A.'s, plaintiff-appellant's, third assignment of error states: THE TRIAL COURT ERRONEOUSLY DECLARED APPELLANT USA'S LEASE A "NULLITY" IN RELIANCE UPON AN UNRELATED COLLATERAL PROCEEDING AT WHICH THE VALIDITY OF APPELLANT USA'S LEASE WAS NEVER LITIGATED, NOR WAS THERE ANY EVIDENCE TAKEN OR FINDING MADE THEREON, THE TRIAL COURT ALSO ERRONEOUSLY REFUSED TO MAKE CIVIL RULE 52 FINDINGS OF FACT AND CONCLUSIONS OF LAW. -11- Due to our disposition of appellant's first and second assignments of error, this claimed error has been rendered moot. See App.R. 12(A)(1)(c). This case is reversed and remanded for further proceedings. Judgment reversed. -12- This cause is reversed and remanded for further proceedings consistent with the opinion herein. It is, therefore, considered that said appellant recover of said appellee its costs herein. It is ordered that a special mandate be sent to said 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. PORTER, J. and O'DONNELL, J., CONCUR. DAVID T. MATIA PRESIDING JUDGE 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 .