COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71316 V.I.P. DESIGN SERVICES, ET AL. : ACCELERATED DOCKET : Plaintiffs-Appellants : : JOURNAL ENTRY -vs- : AND : OPINION TAVENS INDUSTRIES, INC., ET AL. : : Defendants-Appellees : PER CURIAM DATE OF ANNOUNCEMENT OF DECISION MARCH 13, 1997 CHARACTER OF PROCEEDING Civil appeal from Court of Common Pleas Case No. 285474 JUDGMENT Affirmed DATE OF JOURNALIZATION APPEARANCES: For Plaintiffs-Appellants: For Defendants-Appellees: MICHAEL DRAIN, ESQ. WALTER R. MATCHINGA, ESQ. 41 North Main Street EDWARD J. STOLL, JR., ESQ. Chagrin Falls, Ohio 44022 Quandt, Giffels & Buck Co., L.P.A. 800 Leader Building 526 Superior Avenue, N.E. Cleveland, Ohio 44114-1460 MARVIN N. HALPERN, ESQ. 815 Superior Avenue, N.E. Suite 1623 Cleveland, Ohio 44114-2707 - 2 - PER CURIAM: This appeal is before the Court on the accelerated docket pursuant to App. R.11.1 and Loc.App.R. 25. Plaintiffs-appellants V.I.P. Design Services, et al. appeal from the summary judgment entered by the trial court in favor of the defendants-appellees Tavens Industries, Inc., et al. holding defendants not liable as lessors for flooding to the leased premises alleged to have caused damages to the business of plaintiffs/lessees. We find no error and affirm. On October 9, 1984, plaintiffs-lessees entered into a lease of commercial property at 4801 Chaincraft Road in Garfield Heights, Ohio with defendant, Albert L. Tavens, lessor. Plaintiffs used the premises for a cabinet-making business from January 1989 through November 1990. On or about September 22, 1989, a major flood occurred on the property causing damage to plaintiffs' business. Plaintiffs filed the instant action on February 27, 1995 alleging that they suffered property damage, loss of customers, profits and future business as a result of the flooding on the premises. Plaintiffs alleged that defendants-lessors were responsible for the damage due to their negligent misrepresentation and negligent failure to warn of previous flooding. Specifically, in Count I, plaintiffs alleged that prior to the tenancy, defendants misrepresented to plaintiffs that "the - 3 - premises were free from flooding." Plaintiffs claimed that such misrepresentation was negligent. (Complaint 3, 5). In Count II, plaintiffs claimed that "defendants knew or should have known of the conditions of the premises which could and did cause flooding to the premises, that they had a duty to notify plaintiffs of such conditions" but negligently failed to do so resulting in plaintiffs' losses. (Complaint 7). On March 5, 1995, defendants moved for summary judgment on the grounds that plaintiffs failed to assert a cause of action upon which recovery could be granted and they would be unable to prove lost profits with reasonable certainty. In opposing the motion for summary judgment, plaintiffs offered evidence of their damage estimates by an accountant. However, no argument or evidence was presented by plaintiffs on the liability issues of "negligent misrepresentation" or "negligent failure to warn." In their appellate brief herein (Aplt's Brf. at 7-8), plaintiffs argue that the non-moving parties (plaintiffs) need not submit countervailing factual material when it is clear from the materials submitted by the movant that genuine issues of fact exist. In essence, plaintiffs argue: "Defendants were not entitled to judgment as a matter of law on the negligent misrepresentation issue, because such a cause of action does exist in Ohio." Id. We will address Assignment of Error I first because we find it is dispositive of this appeal. - 4 - - 5 - I. THE TRIAL COURT ERRED TO THE PREJUDICE OF PLAINTIFFS TO THE EXTENT THAT IT GRANTED DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ON THE BASIS THAT OHIO DOES NOT RECOGNIZE A LESSEE'S CAUSE OF ACTION FOR NEGLIGENT MISREPRESENTATION BY A LESSOR. Defendants' motion for summary judgment on the negligent misrepresentation issues was really a challenge to the legal sufficiency of the plaintiffs' claims, i.e., it was more like a Civ.R. 12(B)(6) motion to dismiss or a Civ.R. 12(C) motion for judgment on the pleadings since defendants contend that the cause of action pleading negligent misrepresentation is not cognizable as a matter of landlord-tenant law. Plaintiffs contend that it is. In any event, the issue is joined and we will address the merits because the parties agree that there are no genuine issues of material fact which prevent disposition of that issue as a matter of law. Under Civ.R. 56, summary judgment is proper when: (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 the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the nonmoving party, that conclusion is adverse to the party against whom the motion for summary judgment is made. State ex rel. Parsons v. Fleming (1994), 68 Ohio St.3d 509, 511; Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327. It is well settled that the party seeking summary judgment bears the burden of showing that no genuine issue of material fact exists for trial. Celotex Corp. v. Catrett (1987), 477 U.S. 317, 330; - 6 - Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 115. Doubts must be resolved in favor of the nonmoving party. Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 358-59. However, the nonmoving party must produce evidence on any issue for which that party bears the burden of production at trial. Wing v. Anchor Media, Ltd. (1991), 59 Ohio St.3d 108, 111; Celotex, supra, at 322-323. In accordance with Civ.R. 56(E), "a nonmovant may not rest upon the mere allegations or denials of his pleadings, but must set forth specific facts showing there is a genuine issue for trial." Chaney v. Clark Cty. Agricultural Soc. (1993), 90 Ohio App.3d 421, 424. In Dresher v. Burt (1996), 75 Ohio St.3d 280, the Supreme Court of Ohio modified the summary judgment standard as was applied under Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St. 3d 108. Presently, under the new standard, "*** the moving party bears the initial responsibility of informing the trial court of the basis for the motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of fact or a material element of the nonmoving party's claim." Dresher at 296. This Court reviews the lower court's granting of summary judgment de novo. Brown v. Scioto Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711 ("We review the judgment independently and without deference to the trial court's determination"). An appellate court reviewing the grant of summary judgment must - 7 - follow the standards set forth in Civ.R. 56(C). "The reviewing court evaluates the record *** in a light most favorable to the nonmoving party. *** [T]he motion must be overruled if reasonable minds could find for the party opposing the motion." Saunders v. McFaul (1990), 71 Ohio App.3d 46, 50; Link v. Leadworks Corp. (1992), 79 Ohio App.3d 735, 741. Plaintiffs' complaint is premised on the defendants-lessors negligent misrepresentation or negligent failure to warn of potential flooding to the demised premises which allegedly damaged plaintiffs' cabinet making inventory and work in process. Defendants argue that in the absence of fraud, statutory obligation, or agreement, there is no liability on a lessor of commercial premises for negligent misrepresentation or failure to warn of a condition of the premises. The law of Ohio is certainly in accord with this statement. In the recent case of Shump v. First Cont.-Robinwood (1994), 71 Ohio St.3d 414, 417- 419, the Supreme Court had occasion to revisit the landlord's non-liability for harmful conditions of the premises as follows: At early common law, a landlord generally was immune from tort liability for any injuries sustained by any person due to dangerous conditions on a leased premises in the exclusive possession of a tenant, even if the dangerous condition existed at the commencement of the tenancy. [Citations omitted.] Absent fraud or an agreement to the contrary, a landlord simply owed no one a legal duty with regard to dangerous conditions upon a leased premises in the exclusive possession of a tenant. See 5 Harper & James, supra, Section 27.16; Prosser, supra at 434-435; Page, supra, at 180; 2 Restatement of the Law 2d, Torts, supra, Section 356, Comment a. - 8 - * * * In Stackhouse v. Close (1911), 83 Ohio St. 339, 94 N.E. 746, paragraph one of the syllabus, this court expressly accepted some of these exceptions by stating, "A lessor of a building out of possession and control is not liable to the tenant or other person rightfully on the premises for their condition, in the absence of deceit or of any agreement or liability created by statute." (Emphasis added.) See, also, Shroades v. Rental Homes, Inc. (1981), 68 Ohio St.2d 20, 23, 22 O.O.3d 152, 154, 427 N.E.2d 774, 777 (noting that the "breach of a duty imposed by statute has been one exception to the landlord's immunity from tort claims"). R.C. 5321.04 is one of the statutory exceptions to a landlord's common-law immunity and has expanded the duties a landlord owes to "persons using rented residential premises." Shroades at 25, 22 O.O.3d at 155, 427 N.E.2d at 778. This Court has held that the doctrine of implied warranty of fitness does not extend to commercial leases. The doctrine of caveat emptor still applies and the tenant takes the commercial premises as he finds them with all existing defects. Truetried Service Co. v. Hager (Jan. 23, 1997), Cuyahoga App. No. 70163, unreported; Hoffman v. The Fitness Circuit, Inc. (April 12, 1992), Cuyahoga App. No. 60238, unreported, citing Hendrix v. Eighth and Walnut Corp. (1982), 1 Ohio St.3d 205, 208. These principles were also recognized in Parma Podiatry Clinic dba Madison Podiatry v. Madison Clinic, Inc. (March 22, 1996), Lake App. No. 95-L-039, unreported at 2-3: In Ohio, the general rule as to commercial leases is that a landlord, in the absence of fraud or concealment or a written agreement to the contrary, who is not in possession of the premises is not liable to the tenant for damages - 9 - resulting from the condition of the premises. Shinkle, Wilson and Kreis Co. v. Birney and Seymour (1903), 68 Ohio St. 328, 334, 67 N.E. 715; Rosen v. Concordia Evangelical Lutheran Church, Inc. (1960), 111 Ohio App. 54, 58, 167 N.E.2d 671. Ohio courts have consistently held that there is no implied warranty that premises are suited for a particular purpose in a lease agreement. Shinkle, supra; Rotte v. Meierjohan (1946), 78 Ohio App. 387, 389, 70 N.E.2d 684; Branham v. Fordyce (1957), 103 Ohio App. 379, 383, 145 N.E.2d 471. While the rule in Ohio has changed over the years regarding residential leases, in the context of commercial leases, the rule in Ohio is still caveat emptor. The Supreme court of Ohio has held: "*** the commercial lessor's liability is governed by traditional common law principles. Under the common law, one having neither possession nor control of premises is ordinarily not liable for damages resulting from the condition of the premises. See, e.g., Pitts v. Housing Authority (1953), 160 Ohio St. 129 [51 Ohio Op. 51, 113 N.E.2d 869]; Brown v. Baseball Co. (1952), 158 Ohio St. 1 [47 Ohio Op. 478, 106 N.E.2d 632]. The lessor who does not retain the right to admit or exclude others from the premises has generally not reserved the degree of possession or control necessary to impose liability for the condition of the premises. Pitts v. Housing Authority, supra; Cooper v. Roose (1949), 151 Ohio St. 316 [39 Ohio Op. 145, 85 N.E.2d 545]." Hendrix v. Eighth and Walnut Corp. (1982), 1 Ohio St.3d 205, 207, 438 N.E.2d 1149; see, also, Fireman's Fund Ins. Co. v. BPS Co. (1985), 23 Ohio App.3d 56, 60, 491 N.E.2d 365; Hoffman v. The Fitness Circuit (Apr. 2, 1992), Cuyahoga App. No. 60238, unreported. Since plaintiffs specifically base their claims for relief solely on negligent misrepresentation or negligent failure to warn, we are compelled to apply the prevailing landlord-tenant law of Ohio described above and hold that plaintiffs have failed - 10 - to state a claim entitling them to relief. Summary judgment was properly granted. Assignment of Error I is overruled. II. THE TRIAL COURT ERRED TO THE PREJUDICE OF PLAINTIFFS IN GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT WHERE THERE WERE GENUINE ISSUES OF MATERIAL FACT WITH RESPECT TO LOST PROFITS SUSTAINED BY PLAINTIFFS. Based on our disposition of Assignment of Error I, this assignment of error is moot and need not be addressed. App.R. 12(A)(1)(c). Judgment affirmed. - 11 - It is ordered that appellees recover of appellants 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 Court of Common Pleas 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. JAMES M. PORTER, PRESIDING JUDGE TERRENCE O'DONNELL, JUDGE KENNETH A. ROCCO, JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also, S.Ct.Prac.R. II, Section 2(A)(1). .