Opinion
No. 91 CVF 23979.
Decided December 24, 1992.
John J. Duffey Assoc. and John J. Duffey, for plaintiffs Kurt P. York et al. Mittendorf Lasko and John D. Poplos, for defendant George Framm Enterprises, Inc.
In September 1987, the defendant entered into a lease agreement with the plaintiffs herein. The leasehold was a certain storefront property located at 9716 Lorain Avenue, in the city of Cleveland.
The defendant occupied the premises under the terms of the lease from approximately October 1, 1987 until September 30, 1990. This dispute arose following the defendant's vacation of the property.
The plaintiffs allege that upon reentering the leasehold, they discovered that the defendant had removed a number of fixtures and caused considerable damage to the premises in the process, to the tune of some $4,540.52. In addition, the plaintiffs have also alleged that the defendant owes them for outstanding utility bills in the amount of $136.61, and rent for the month of October 1990, in the amount of $360.
The plaintiffs also allege that the fixtures which the defendant removed, consisting of four jewelry cases, were not installed by the defendant and were, therefore, removed wrongfully from the property. They maintain that they are entitled to be compensated for their loss in the amount of $4,000.
In its answer and counterclaim, the defendant not only denied that it owed the plaintiffs any money, but to the contrary asserted that, due to the plaintiffs' failure to properly maintain the premises, the plumbing in the storefront broke down and water flooded the unit. The defendant alleges that thousands of dollars of inventory and equipment were lost as a result.
Additionally, the defendant alleged that the jewelry cases which it removed were trade fixtures and that it properly retained them.
At trial, the plaintiffs outlined the damage that they alleged was caused by the defendant, both during the tenancy and at the time that the defendant vacated the premises. That damage included a missing storm door, gouges in the walls, damage to the plaster, missing light fixtures, missing ceiling tiles, damaged electrical connections, and a malfunctioning air conditioner.
The defendant was not able to present at trial any documentary evidence of its alleged losses, nor did it establish the value of the items which it claimed were damaged by the plumbing breakdown. In addition, under cross-examination, the defendant was forced to concede that maintenance of the premises, including the plumbing, was the lessee's responsibility under the terms of the lease.
The defense denied that any of the defendant's actions in removing the jewelry cases caused the damages to the storefront's walls alleged by the plaintiffs.
The issues for resolution in this case are (1) the responsibilities of the respective parties for maintenance of the premises, (2) whether the defendant held over in the leasehold into the month of October 1990, and failed to pay rent therefor, and (3) whether the jewelry cases which the defendant removed from the premises were, in fact, trade fixtures.
The first issue is decisively clarified by a plain reading of the terms of the parties' lease contact. Under its terms, "* * * LESSEE will keep said premises in good repair * * * during the term of the lease at LESSEE'S own expense. * * *" The lease goes on to provide: "6. That the LESSOR shall not be liable for any damage occasioned by failure to keep said premises in repair and shall not be liable for any damage done or occasioned by or from plumbing * * *, water, steam, or other pipes. * * *" In the last paragraph, the lease provides additionally that "[t]he Lessee shall maintain the inside of the premises in good condition and repair at all times herein and re-decorate at [its] own expense. The Lessee shall also assure that any repairs or maintenance to premises is in accoradance [ sic] with all applicable building codes. The Lessor shall keep and maintain the exterior of the premises in good condition and repair at all times and make all major interior repairs and replacements, excluding the cooling system, which shall be the responsibility of the Lessee."
From the above language, the clear intent of the parties appears to have been to hold the defendant responsible for the maintenance of the interior of the leasehold and any expenses attendant thereto. It would also appear that the parties intended to require the plaintiffs to maintain the exterior of the leasehold. Under no circumstances, however, does this lease envision that the plaintiffs would be obligated to the defendant for damages if they failed to maintain the exterior or, for that matter, if they failed to perform any anticipated major repair or replacement contemplated under the agreement. To the contrary, the only rational interpretation of the language used is an unqualified release of the plaintiffs from any and all responsibility for maintenance-related damage done to the property during the life of the lease.
By the specific terms of the lease, maintenance-related damage included damage resulting from failure to maintain the plumbing. Thus, the defendant is precluded, by its agreement, from obtaining any relief for the losses which it claims to have suffered from the plumbing breakdown.
However, even if the lease could be read to allow for the recovery of such damages, the defendant would still be precluded from recovery in this case due to its complete failure during the trial to establish the extent of its loss and the value of the property it claims was destroyed.
With regard to the second issue, a review of the court's trial notes does not reveal any evidence to sustain the plaintiffs' allegation that the defendant held over in the leasehold during the month of October 1990, and failed to pay therefor. The plaintiffs have thus failed to sustain their burden of proof on this issue.
We turn, therefore, to the remaining issue before the court, to wit: Were the items removed from the premises by the defendant trade fixtures, which it had a right to detach from the realty? The following definition for "trade fixtures" may be found in Black's Law Dictionary (Rev. 4 Ed. 1968) 766:
"Articles placed in or attached to rented buildings by the tenant, to prosecute the trade or business for which he occupies the premises, or to be used in connection with such business, or promote convenience and efficiency in conducting it. Herkimer County L. P. Co. v. Johnson, 37 App. Div. 257, 55 N.Y.Supp. 924; Brown v. Reno Electric L. P. Co., C.C.Nev., 55 F. 231; Northwestern Lumber Wrecking Co. v. Parker, 125 Minn. 107, [109,] 145 N.W. 964, 965. Such chattels as merchants usually possess and annex to the premises occupied by them to enable them to store, handle, and display their goods, which are generally removable without material injury to the premises. Lovett v. Bermingham-Seaman-Patrick Co., 192 Mich. 372, [376-377,] 158 N.W. 881, 883."
Trade fixtures were also the subject of a well-reasoned opinion recently decided by Judge Rodgers of the Marion Municipal Court. In Brown v. DuBois (1988), 40 Ohio Misc.2d 18, 532 N.E.2d 223, Judge Richard M. Rogers quoted extensively from the lead case in this area of the law, Teaff v. Hewitt (1853), 1 Ohio St. 511. Inter alia, the Teaff case held that a personal chattel becomes a fixture when three standards can be found:
"`1st. Actual annexation to the realty, or something appurtenant thereto.
"`2d. Appropriation to the use or purpose of that part of the realty with which it is connected.
"`3d. The intention of the party making the annexation, to make the article a permanent accession to the freehold — this intention being inferred from the nature of the article affixed, the relation and situation of the party making the annexation, the structure and mode of annexation, and the purpose or use for which the annexation has been made.' (Emphasis sic.)" Brown v. DuBois, supra, 40 Ohio Misc.2d at 20-21, 532 N.E.2d at 226, quoting Teaff v. Hewitt, supra, at 530.
The Brown case also quoted the definition of "trade fixtures" found at 50 Ohio Jurisprudence 3d (1984) 119-120, Fixtures, Section 21:
"`"Trade fixtures" are those which the tenant places on demised premises to promote the purpose of his occupation, and which he may remove during his term. In dealing with trade fixtures, the distinction to be observed is between the business which is carried on upon the premises, and the premises themselves. The former is personal in nature, and articles that are merely accessory to the business, and have been put upon the premises for this purpose, and not as accessions to the real estate, retain the personal character of the principal to which they belong and are subservient. But articles which have been annexed to the premises as accessory to it, whatever business may be carried on there, and not peculiarly for the benefit of the present business, which may be of temporary duration, become subservient to the realty and acquire its legal character.'" Brown v. DuBois, supra, 40 Ohio Misc.2d at 19-20, 532 N.E.2d at 225.
The case before this court differs from the Brown case in at least one significant particular. In Brown, the items alleged to have been trade fixtures were attached to the realty by the party who claimed the right to remove them. In the case at bar, the so-called trade fixtures were attached to the realty by a tenant who was two or more terms removed in time from the tenant who removed them from the leasehold. Thus, the determinative issue here is whether the defendant's lack of temporal proximity serves to defeat its claim to those items which it removed from the premises.
The items in question were already attached to the realty at the time that the defendant entered into the lease agreement with the plaintiffs. Nothing in the lease itself makes any mention of these "trade fixtures."
At trial, no evidence was presented to establish that the defendant had succeeded to the rights of its predecessors with regard to the "trade fixtures." No contract or receipt was produced. No testimony was offered to show that the defendant parted with anything of value in exchange for ownership of the items which it removed from the leasehold.
Utilizing the general principles which have already been discussed, however, the court can draw some conclusions about the matter which pends before it. The facts of this case meet the first two standards set forth in Teaff. The items involved were unquestionably annexed to the realty and were appropriated to the use or the purpose of the realty with which they were attached.
There can be no question that the original tenants who annexed the items to the realty intended them to be permanent accessions to the leasehold. That intention is manifest by the fact that the improvements were nailed in place and were abandoned by those who originally placed them on the premises. Additionally, the testimony at trial established that the items now under discussion were peculiarly suited to the jewelry business in which the defendant was engaged, although they could have been employed to display other goods. In fact, the testimony established that the prior tenants in this space, from its inception, had been jewelers. If the defendant was the party who annexed the display cases and the shelves to the realty, this court would have no problem in finding that all three of the standards set forth in Teaff had been met and that the defendant was entitled to remove the disputed items as trade fixtures, as long as it could do so without causing serious harm to the leasehold.
The Ohio Supreme Court has held that the proper rule of law in this area "* * * provides that degree of flexibility and accommodation to circumstances necessary to ensure that * * * [the parties] will be dealt with fairly, with neither enjoying a windfall gain nor suffering unfair deprivation." Masheter v. Boehm (1974), 37 Ohio St.2d 68, 76-77, 66 O.O.2d 183, 188, 307 N.E.2d 533, 540. The application of that rule to the facts before us is anything but a clear-cut proposition. On the one hand, we are presented with landlords who admittedly did not install the items that were removed, but clearly suffered a loss due to the damage which was done at the time of their removal. On the other hand we are presented with a tenant who has enjoyed the use of the items during its term in the premises, who knew that the items were peculiarly suited for its business, and who apparently believed it had purchased the items when it purchased the business from the previous tenant.
In the absence of some indicia or proof of purchase or ownership presented by the defendant, this court concludes that the equities in this situation reside with the plaintiffs. If the defendant was able to establish that it had succeeded to the rights of the original tenant who installed the "trade fixtures," it failed to shoulder its burden to do so during the course of this trial.
Judgment, therefore, is hereby entered for the plaintiffs on their complaint against the defendant. We turn now then to the question of damages.
The plaintiffs have demanded recompense for a wide variety of damages which they maintain they suffered because of the wrongful actions of the defendant. These include:
1. a water bill of $64.53;
2. replacement of the front door at $200;
3. replacement of a storm door at $125;
4. unauthorized removal of security system at $480;
5. cost of removing defendant's sign at $225;
6. damage to ceiling tiles at $24;
7. missing mop and bucket at $50;
8. ceiling fixture taken by defendant at $90;
9. repairs to air conditioning at $1,857;
10. repair to walls — labor and materials at $1,489.52;
11. an electric bill of $52.08;
12. a gas bill of $20; and
13. value of fixtures removed by defendant at $4,000.
The court finds support for the plaintiffs' contentions in the evidence concerning the utility bills, the damage to the ceiling tiles, the removal of the ceiling fixture, the repairs to the walls, and the removal of the display cases and shelving. With regard to the balance, either because of the parties' contractual agreement or a failure of proof, the court believes that recovery is not warranted. The amount of damages is therefore fixed at $5,740.05, plus costs and statutory interest, for which judgment is rendered.
For the reasons previously stated in this opinion, the court further finds that the defendant has failed to shoulder its burden of proof with regard to the counterclaim. The court therefore enters judgment for the plaintiffs on the defendant's counterclaim.
The costs of this action are to be borne by the defendant.
So ordered.