Tanglewood Shopping Ctr., L.L.C. v. Riser Foods Co.

Citation: 2018 Ohio 1183Docket: 105364

Court: Ohio Court of Appeals; March 29, 2018; Ohio; State Appellate Court

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Tanglewood Shopping Center, L.L.C. (plaintiff-appellant) appeals the trial court's summary judgment favoring Riser Foods Company (defendant-appellee). Tanglewood is the successor-in-interest and landlord of a shopping center in Geauga County, Ohio, where Riser operates a Giant Eagle supermarket. They entered a 20-year commercial lease in 1996, outlining rent obligations divided into base rent and percentage rent based on gross sales, with specified annual increases per square foot for the base rent.

The lease specified a total area of approximately 63,733 square feet, with base rent structured to increase over the lease term. Additionally, Riser was responsible for a proportional share of real estate taxes and assessments. A November 20, 2008 amendment allowed Riser to expand its store to a total of 78,648 square feet, which presented a discrepancy: the amendment indicates the original premises as 66,297 square feet, which exceeds the original figure used for base rent calculations by 2,564 square feet. The trial court acknowledged this inconsistency but upheld Riser's position, leading to the appeal. The Court of Appeals affirmed the trial court's judgment.

The amendment to the lease facilitated Riser's expansion and modified sections 3.1 and 3.2, resulting in increased base rent over the lease term. The amended monthly base rent escalates from $77,009.50 initially to $96,671.50 by the 20th year, with no indication that the rent was based on square footage, unlike the original lease. While the amendment specified a 12,351 square feet expansion area, it allowed for greater expansion. Section 4(b) required Riser to submit plans for the expansion, which Tanglewood could approve or reject within 15 days; failure to respond would result in deemed approval. Riser submitted plans on September 25, 2009, and Tanglewood accepted them on October 20, 2009, after the approval period had elapsed. The expansion ultimately exceeded the designated area by 1,349 square feet. Tanglewood acknowledged the approval of Riser's plans but argued it did not consent to free occupation of the additional space, claiming Riser became a tenant at will regarding that area. Tanglewood filed an action against Riser on December 20, 2013, asserting claims for breach of contract, declaratory judgment, reformation of contract, unjust enrichment, and trespass, all based on the premise that Riser’s construction violated the amendment’s terms. Tanglewood moved for partial summary judgment on June 10, 2014, contending that Riser's occupancy of the additional space constituted a tenant at will status, warranting compensation for its use.

On June 20, 2014, Riser filed a motion for summary judgment, asserting that the lease specified a fixed amount of base rent for the entire expansion, including the vestibule, as Tanglewood consented to the expansion without requesting additional rent. On December 15, 2015, the trial court granted Riser’s motion and denied Tanglewood’s partial summary judgment motion. Tanglewood appealed the dismissal of its unjust enrichment and trespass claims, raising two assignments of error.

In its first assignment, Tanglewood contended that the trial court mistakenly determined that the expanded premises, including the vestibule, were governed by the lease amendment, which defined the premises as exactly 78,648 square feet. Tanglewood argued that the 1,349 square feet of the vestibule should not be included under this definition. In its second assignment, Tanglewood claimed error in the denial of its recovery for unjust enrichment and trespass. The trial court concluded that the amendment redefined the leased property to include the original premises plus the expansion area, which was not limited to a specific square footage.

The court's review of summary judgment is de novo, requiring an evaluation of whether there are genuine material facts and if the moving party is entitled to judgment as a matter of law. Tanglewood's arguments focused on the definitions of 'premises,' 'expansion area,' and 'tenant’s expansion work.' The court disagreed with Tanglewood's assertion that the premises were limited to 12,351 square feet, noting that the lease allowed for Tanglewood to approve expansions beyond the originally stated area, which it did. The lease also affirmed that it constituted the entire agreement regarding the premises, and Tanglewood’s consent to the expansion undermined its current challenge. The court found no basis to ignore Tanglewood's prior approval of Riser's expansion plans, under which Riser was obligated to pay the fixed base rent.

Tanglewood's argument hinges on the inclusion of its right to object to construction plans beyond the designated expansion area, yet the court emphasizes the critical point that Tanglewood approved Riser’s plans, rendering the origin of its objection right irrelevant. Tanglewood contends that its approval is ineffective in enlarging the premises due to the lack of a separate written conveyance for the over-expansion, but the court disagrees. It affirms the trial court's view that Tanglewood’s approval did result in an increase in the total square footage as governed by the amendment, which anticipated construction beyond the specified expansion area. The amendment does not provide for an adjustment in property description or increase in base rent should Tanglewood consent to such an expansion. The court concludes that both parties benefited from the arrangement, with Riser acquiring the expanded area in exchange for the agreed rent. Tanglewood's claims for unjust enrichment and trespass are rejected, as unjust enrichment cannot apply where a valid contract exists. The court reiterates that unjust enrichment requires proof of benefit conferred, knowledge of that benefit, and unjust retention, which is not applicable here due to the enforceable contract between the parties. Thus, Tanglewood's claims are found to lack merit.

The lease amendment defined the obligations of Tanglewood and Riser concerning the premises and Riser’s expansion. Tanglewood's unjust enrichment claim fails as it disregards the negotiated terms of the amendment, under which Riser made required payments. Tanglewood's intention to charge base rent based on the expansion’s square footage is not sufficient for a successful claim. Additionally, Riser is not liable for trespass because the parties had agreed to an increased rent for the expansion, negating any basis for Tanglewood's claim. Tanglewood's citation of case law regarding holdover tenants does not apply, as there was no violation of the amendment's terms by Riser. Tanglewood's potential trespass claim also fails since it had consented to Riser's construction activities, undermining any assertion that Riser acted without authority. The trial court's summary judgment in favor of Riser is affirmed, with costs awarded to Riser and a mandate issued for execution of the judgment. The appellate judges concurred in this decision.