Boatwright v. Penn-Ohio Logistics , 2012 Ohio 6238 ( 2012 )

[Cite as Boatwright v. Penn-Ohio Logistics, 2012-Ohio-6238.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
LAWRENCE BOATWRIGHT, ) CASE NO. 12 MA 39
)
PLAINTIFF-APPELLANT, )
)
VS. ) OPINION
)
PENN-OHIO LOGISTICS, et al., )
)
DEFENDANTS-APPELLEES. )
CHARACTER OF PROCEEDINGS: Civil Appeal from Common Pleas Court,
Case No. 11CV1180.
JUDGMENT: Affirmed.
APPEARANCES:
For Plaintiff-Appellant: Attorney Gary Kisling
3412 West Market Street
Akron, Ohio 44333
For Defendants-Appellees: Attorney Matthew Vansuch
Attorney Kevin Murphy
108 Main Avenue, Suite 500
Warren, Ohio 44481
JUDGES:
Hon. Joseph J. Vukovich
Hon. Cheryl L. Waite
Hon. Mary DeGenaro
Dated: December 24, 2012
[Cite as Boatwright v. Penn-Ohio Logistics, 2012-Ohio-6238.]
VUKOVICH, J.
{¶1} Plaintiff-appellant Lawrence Boatwright appeals the decision of the
Mahoning County Common Pleas Court granting defendants-appellees American
Steel City Industrial Leasing, Inc. (ASC) and Bill Marsteller’s Motion for Summary
Judgment. Boatwright was injured while working at a facility leased from ASC to
Boatwright’s employer, Penn-Ohio Logistics (Penn-Ohio). The floor of the warehouse
collapsed while Boatwright was stacking steel, causing him and the steel to fall into
the basement below. Boatwright sued ASC and Marsteller (owner of ASC) for
damages based on premise liability. Five issues are raised in this case. The first is
whether ASC is a landlord out of possession and thus is not liable for damages on
the premises. The second is whether the basement can be considered to be a defect
under the facts of this case. The third issue is when a lease requires a landlord to
follow all laws, does the failure to follow any law operate to make the landlord liable
for the accident? The fourth issue is whether Marsteller is individually liable for his
alleged failure to inform Penn-Ohio of the basement. The fifth and final issue is
whether the Ohio Bureau of Workers’ Compensation has a subrogation claim. For
the reasons expressed below, the trial court’s grant of summary judgment is hereby
affirmed.
Statement of the Case
{¶2} On August 29, 2006, Boatwright was injured while working at a
warehouse located at 3710 Hendricks Road, Austintown, Mahoning County, Ohio.
Boatwright’s employer, Penn-Ohio Logistics, leased portions of this warehouse from
ASC. Specifically Penn-Ohio was leasing Bays 23, 23A, 25, 25A, 27, 29 and a
tornado shelter that was located under a portion of one of the bays it was leasing.
{¶3} In addition to the tornado shelter, there was a basement area under bay
25. Portions of this basement area were leased to Kundel Industries. Penn-Ohio
allegedly did not know there were any basement areas other than the tornado shelter
it leased.
{¶4} At the time of the injury, Boatwright was unloading and stacking steel
bundles in bay 25 with one of his fellow employees, Ray Queen. Due to weight of
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the steel, the floor on which they were stacking steel collapsed, causing the
employees and the steel to fall to the basement below. The collapse did not occur
over the tornado shelter; Penn-Ohio allegedly was unaware there was a basement
area located under where the collapse occurred. Steel and concrete landed on both
employees causing extensive injuries.
{¶5} In 2008, Boatwright filed a complaint against Penn-Ohio, ASC, and
Marsteller. That complaint was voluntarily dismissed in 2010.
{¶6} In April 2011, the complaint was refiled and the Ohio Bureau of
Workers’ Compensation (OBWC) was added as a defendant. In the 2011 complaint,
Boatwright alleged Marsteller and ASC were negligent in failing to disclose that there
was a basement below bay 25 when Marsteller and ASC knew that Penn-Ohio was
stacking large amounts of steel in bay 25. That complaint also contained employer
intentional tort claims against Penn-Ohio and a subrogation claim against the OBWC.
In May 2011 the claims against Penn-Ohio were voluntarily dismissed by Boatwright.
In July 2011, upon the motion of OBWC, the trial court realigned the parties and
named OBWC as a plaintiff since its interests were aligned with those of Boatwright.
{¶7} ASC and Marsteller answered the complaint and filed a motion for
summary judgment. In the motion, ASC and Marsteller claimed that summary
judgment should be granted in their favor for five reasons.
{¶8} First, ASC and Marsteller claimed that the doctrine of stare decisis
required summary judgment to be granted in their favor. In 2010, the Eleventh
Appellate District, facing the same arguments and issues regarding this same
accident that caused injuries and ultimately the death of Queen, granted summary
judgment in ASC and Marsteller’s favor. Currier v. Penn-Ohio Logistics, 187 Ohio
App.3d 32, 2010-Ohio-198, 931 N.E.2d 129 (11th Dist.).
{¶9} Second, ASC claimed it was not in possession or control of Penn-
Ohio’s premises. Thus, it owed no duty of care to Boatwright. It argued that in
regard to commercial leases, the rule in Ohio is caveat emptor. As such, a lessor
has no liability for any injuries to third parties occurring on leased property that is out
of the lessor’s possession and control.
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{¶10} Third, ASC and Marsteller asserted that they were under no duty to
disclose the lack of solid earth under the floor, i.e. the existence of the basement,
because not only is the mere existence of a basement not a defect, but even if it is a
defect, in regards to commercial leases there is no requirement to disclose a defect.
{¶11} Fourth, ASC argued that even if it was not a landlord out of possession
it still is not liable because ASC and Marsteller had no notice that Penn-Ohio was
stacking steel beams in a quantity that substantially exceeded the floor’s capacity.
{¶12} Fifth, Marsteller asserted that he cannot be personally liable because
the actions he took were performed in his capacity as president.
{¶13} Boatwright disputed all of these positions in his motion in opposition. He
claimed that Currier is not binding. He asserted that ASC is a landlord in possession
because Marsteller had the right to access the premises leased by Penn-Ohio and
the basement below bay 25. Regardless, according to him, even if ASC was not in
possession, Marsteller and ASC still had duty to disclose the existence of a
basement, which was a defect that was not obvious or was hidden. Furthermore,
Boatwright argued that the lease required ASC to follow the law. When ASC did not
post weight limits for the floor, which is required by law, it was not following the law.
Thus, it breached the contract and was liable for the injury. Lastly, he contends that
Marsteller can be found liable because the injured person may sue the principal and
the agent, i.e. the corporation and the corporation’s employee.
{¶14} After consideration of both parties’ motions, the magistrate entered a
decision granting summary judgment in ASC and Marsteller’s favor. Boatwright
timely objected to that decision. ASC and Marsteller responded to those objections.
The trial court reviewed those objections and granted summary judgment in ASC and
Marsteller’s favor. Boatwright timely appealed that decision.
Standard of Review
{¶15} All four assignments of error address the grant of summary judgment.
Thus, the standard of review employed by this court in reviewing each argument is
the same, a de novo standard of review. Cole v. Am. Industries & Resources Corp.,
128 Ohio App.3d 546, 552, 715 N.E.2d 1179 (7th Dist.1998). Thus, we apply the
same test as the trial court. Civ.R. 56(C) provides that the trial court shall render
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summary judgment if no genuine issue of material fact exists and when construing
the evidence most strongly in favor of the nonmoving party, reasonable minds can
only conclude that the moving party is entitled to judgment as a matter of law. State
ex rel. Parsons v. Flemming, 68 Ohio St.3d 509, 511, 628 N.E.2d 1377 (1994).
First Assignment of Error
{¶16} “The trial court erred to the prejudice of appellant in finding that ASC
was a landlord out of possession.”
{¶17} It is undisputed that this case involves a commercial lease. “[T]he
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.” Currier, 187
Ohio St.3d 32, 2010-Ohio-198, ¶ 16, quoting Hendrix v. Eighth & Walnut Corp., 1
Ohio St.3d 205,207, 438 N.E.2d 1149. See also Target Industries v. Stubbs, 8th
Dist. No. 95101, 2011–Ohio–1563, appeal not allowed by 129 Ohio St.3d 1505,
2011–Ohio–5358, 955 N.E.2d 387.
{¶18} The trial court heavily relied on Currier in finding that ASC was not a
landlord in possession. As aforementioned, Queen died as a result of this same
accident. His estate filed an action in Trumbull County Common Pleas Court seeking
damages for his death. Many of the same arguments were presented to that court.
The Trumbull County Common Pleas Court granted summary judgment in ASC’s
favor. That cause was appealed to our sister district, the Eleventh Appellate District.
That court affirmed the Trumbull County Common Pleas Court’s decision. In finding
that ASC was not a landlord in possession, the Eleventh Appellate District reasoned:
We note that American's industrial complex covers 750,000
square feet and that American leases other sections of the complex to
other tenants and retains certain parts of the complex for its own uses.
It is undisputed that Marsteller routinely walks through the complex to
get to areas retained by American or to meet with other tenants. As the
Supreme Court held in Hendrix, 1 Ohio St.3d 205, 1 OBR 230, 438
N.E.2d 1149: “Although [the lessor] reserved the right to enter the
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premises * * * for a few specified purposes, such as to inspect the
premises, reservation of such a limited right does not justify a finding
that the lessor retained control of the premises. Cooper v. Roose[, 151
Ohio St. 316, 39 O.O. 145, 85 N.E.2d 545]; Kauffman v. First–Central
Trust Co. (1949), 151 Ohio St. 298, 39 O.O. 137, 85 N.E.2d 796];
Berkowitz v. Winston (1934), 128 Ohio St. 611[, 1 O.O. 269, 193 N.E.
343].” Id. at 207, 1 OBR 230, 438 N.E.2d 1149.
We note that in most leases, whether residential or commercial,
the landlord retains a right to inspect. As the court held in Hendrix, this
does not equate with the power to admit or exclude, the sine qua non of
retained possession and control of commercial property. Id.Currier, ¶ 34-35.
{¶19} The trial court’s reliance on Currier as persuasive authority is not
misplaced. The reasoning is sound, and as the Mahoning County Common Pleas
Court noted, the Currier court’s reasoning involves analysis of the identical facts of
this case.
{¶20} Boatwright does raise three additional facts that were not raised and/or
addressed in the Eleventh Appellate District’s Currier decision. He argues that the
following facts demonstrate that ASC and Marsteller retained control and possession
over the premises: 1) ASC’s alleged possession of the basement below bay 25; 2)
the fact that Marsteller did not inform Penn-Ohio about the basement below bay 25,
and; 3) that Marsteller and ASC retained control over the premises by having
equipment in the bays Penn-Ohio was leasing and allowing Youngstown Steel Door,
previous owner of property, to still operate on the property. Based upon these facts
Boatwright asserts that ASC is not a landlord out of possession, but rather is an
occupier and has control over the premises.
{¶21} The distinction is important because if ASC was an occupier it had a
duty to exercise reasonable care for the protection of its invitees. This means the
occupier must not only use care not to injure the visitor by negligent activities and
warn him of latent dangers that the occupier knows of, but the occupier also has to
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inspect the premises to discover possible dangerous conditions of which he does not
know and take reasonable precautions to protect the invitee from dangers which are
foreseeable from use. Brymer v. Giant Eagle, Inc., 11th Dist. No. 2010-L-134, 2011-
Ohio-4022, ¶ 11.
{¶22} Despite his insistence to the contrary, the three facts brought to this
court’s attention do not render ASC an occupier. Each of them actually evince that
ASC was not in possession or control of bay 25 or the basement below it and thus,
ASC was a landlord out of possession.
{¶23} As aforementioned, the first fact is ASC’s alleged possession over the
basement below bay 25. Boatwright contends that ASC’s possession and control
over that basement is displayed by the fact that ASC rented that space to Kundel
Industries.
{¶24} The fact that ASC had the authority to lease the space to Kundel
Industries and did so prior to the accident does not show ASC had possession and
control over the premises at the time of the accident. Kundel Industries rented the
basement at the time of the accident. As the Currier court noted, once the space is
leased the landlord, although having the right to inspect the property, ceases to have
possession and control of the space. Thus, ASC and Marsteller no longer had
possession or control of the space once it was leased to Kundel Industries.
{¶25} Next, Boatwright contends that Marsteller never told Penn-Ohio about
the basement below bay 25 and this somehow shows that ASC and Marsteller
exercised control over the premises. Even if Penn-Ohio was not told of the existence
of the basement, this does not demonstrate that Marsteller and ASC maintained
control and possession of the basement below bay 25. The most this shows is that
Penn-Ohio had no control or possession over that area. However, that is not the test
for imposing liability on the commercial lessor.
{¶26} The next fact is that when ASC rented bays to Penn-Ohio, including bay
25, ASC allegedly allowed Youngstown Steel Door to maintain some of its operations
in the leased space. Boatwright also claims that Marsteller moved “stuff that was in
areas control by Penn-Ohio into Section 25 that eventually collapsed.” Appellant
Brief page 13.
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{¶27} The depositions show that Marsteller bought this property from
Youngstown Steel Door. However, instead of Youngstown Steel Door moving
completely out of the facility that day, it was slowly phasing out. (Marsteller Depo.
153, 207; Hallsky (Owner of Penn-Ohio) Depo. 76). Thus, some of its operations
continued at the facility. Similar to the above analysis, this does not show that ASC
and Marsteller were in possession and control. If Youngstown Steel Door was
operating in bay 25 then it was in possession and control of that bay.
{¶28} The depositions also show that when Penn-Ohio asked Marsteller to
rent it more space to expand its operations, a lease was drawn up for bays 25, 25A,
and 27A. (Hallsky Depo. 73.) At that time those bays had equipment, inventory
and/or raw material in them that did not belong to Penn-Ohio. Thus, that material
needed to be moved so that Penn-Ohio could use the space. (Hallsky Depo. 74).
The owner of Penn-Ohio explained that Marsteller would move material out of the
area while Penn-Ohio moved the steel it was storing in. (Hallsky Depo. 74.) The
deposition indicates this was a process that took some time. However, at the time of
the accident, from the depositions it appears that Marsteller had removed all of his
material from bay 25 and Penn-Ohio was the only one using it; there is no evidence
to show that Marsteller was still occupying any areas leased by Penn-Ohio.
Moreover, the facts clearly show that Penn-Ohio was stacking steel where the
collapse occurred. There is no indication in the record that other equipment or
materials were present where the collapse occurred that were the property of
Marsteller. Thus, given the above, it is difficult to conclude that this argument shows
that ASC and Marsteller retained possession and control over the premises leased by
Penn-Ohio.
{¶29} Consequently, the facts referenced by Boatwright do not demonstrate
or create a genuine issue of material fact that ASC was an occupier. Rather, the
undisputed facts clearly indicate that ASC was a landlord out of possession.
{¶30} The last argument made by Boatwright under this assignment of error is
that a landlord maintains control over common areas. He asserts that when ASC
rented the basement below bay 25, the ceiling of the basement below bay 25 and the
floor of bay 25 became a common area.
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{¶31} This argument, while somewhat creative, misconstrues what constitutes
a common area. It is true that a landlord who retains possession and control of
common areas is, in general, liable for injuries arising from his neglect to keep the
same in proper repair. Prendergast v. Ginsburg, 119 Ohio St. 360, 363, 164 N.E.
345 (1928) (discussing landlord out possession general rule).
{¶32} In discussing common areas, the cases discuss common porches,
stairways, and hallways. There is no case law where a ceiling/floor that is shared by
two tenants is considered a common area. To consider the ceiling of one unit that
also constitutes the floor of another unit a common area is a stretch.
{¶33} Furthermore, in Prendergast the Court specifically indicated that
common areas are “for use of several tenants.” By definition “several” is a number
“more than two or three but not many.” http://www.thefreedictionary.com/several.
Thus, it must be able to be used by more than two tenants. Clearly, here the ceiling
above the basement is only used by Kundel and the floor to bay 25 is only used by
Penn-Ohio. Thus, the floor/ceiling is not a common area.
{¶34} That said, even if we were to find that the floor/ceiling is a common
area, the landlord is only required to keep it in “proper repair.” The facts of this case
do not suggest that the floor/ceiling was not in proper repair and that that is why it
collapsed. Rather, the evidence shows that the floor/ceiling collapsed because it was
overloaded. Employees from Penn-Ohio clearly indicated that that much steel would
not have been placed in bay 25 had they known that there was a basement below it.
No testimony was offered that the floor/ceiling was in need of repair.
{¶35} For all the above reasons, there is no merit to the argument as it
regards common areas.
{¶36} In conclusion, this assignment of error lacks merit. The trial court’s
finding that the evidence, even when viewed in the light most favorable to Boatwright,
showed that ASC was a landlord out of possession is upheld.
Second Assignment of Error
{¶37} “The trial court erred to the prejudice of appellant in finding that ASC
was not liable for the nondisclosure of a defect.”
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{¶38} Boatwright contends that even if we find that the trial court’s conclusion
that ASC is a landlord out of possession is correct, ASC and Marsteller are still liable
because they failed to disclose a hidden or latent defect. Boatwright additionally
contends that the doctrine of caveat emptor does not apply and cites Shump v. First
Continental-Robinwood Assoc., 71 Ohio St.3d 414, 644 N.E.2d 291 (1994) to support
his position. Boatwright claims that the basement, itself, is the hidden or latent
defect. In making this argument Boatwright acknowledges that a basement is usually
not a defect. However, he contends that it is a defect when the existence of the
basement creates a weaker floor and that floor is used to stack steel. Thus, he is in
essence arguing that the floor is defective for the purpose used.
{¶39} ASC counters this argument asserting that the doctrine of caveat
emptor applies to the commercial setting unless it can be shown that the commercial
landlord fraudulently concealed defects that are not discoverable by the tenant upon
practicable examination. Shinkle v. Birney, 68 Ohio St. 328, 334 (1903). It contends
that the basement is not a defect and that it was discoverable by reasonable
inspection.
{¶40} The trial court found that the basement was not a defect and that there
was no evidence that ASC fraudulently concealed “anything about this property.”
01/30/12 J.E.
{¶41} Similar to Assignment of Error No. 1, these issues of whether the
doctrine of caveat emptor applies, whether the basement is a defect and whether
ASC fraudulently concealed the basement were raised to our sister district in Currier.
The Eleventh Appellate District specifically found that while the rule in Ohio has
changed over the years regarding the duties of landlords under residential leases, in
the context of a commercial lease, the doctrine of caveat emptor still applies. Currier,
187 Ohio App.3d 32, 2010-Ohio-198, 931 N.E.2d 129, ¶ 16, citing Parma Podiatry
Clinic v. Madison Clinic, Inc. (Mar. 22, 1996), 11th Dist. No. 95-L-039 and Hendrix, 1
Ohio St.3d 205, 207, 438 N.E.2d 1149. Furthermore, regarding the reliance on the
Shump case and the standard to be used to determine if anything was concealed,
the Eleventh District, in Currier, espoused:
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Next, appellant argues that even if American was not liable as a
landlord in possession or control or in violation of an agreement in the
lease, American would still be liable because it concealed or failed to
disclose a known, nonobvious defect. Appellant cites Shump v. First
Continental–Robinwood Assoc. (1994), 71 Ohio St.3d 414, 644 N.E.2d
291, in support. However, Shump involved a residential lease and is
therefore not applicable.
In Stackhouse, 83 Ohio St. 339, 94 N.E. 746, the Ohio Supreme
Court held: “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 * * *.” Id. at paragraph one of the
syllabus. In Shinkle v. Birney (1903), 68 Ohio St. 328, 67 N.E. 715, the
Supreme Court explained a commercial lessor's liability based on
deceit as follows: “[I]f the lessor has knowledge of defects in the
premises which are not discoverable by the tenant upon practicable
examination, * * * liability arises from the fraudulent concealment of
such defects * * *.” Id. at 334. The court held that such a claim required
proof of actual fraud. Id.
Currier, 187 Ohio App.3d 32, 2010-Ohio-198, ¶ 44-45.
{¶42} This statement of the law is accurate. Consequently, in order for ASC
and Marsteller to be liable, Boatwright had to show that there was fraudulent
concealment. If that is not shown, the doctrine of caveat emptor applies.
{¶43} Regarding whether the basement was a defect and was fraudulently
concealed, the Currier court explained:
Here, appellant argues that the basement under the floor where
Queen was working was a defect. However, there is nothing about a
basement that would suggest that by its nature, a basement is a defect.
Of course, basements are found in many residences and commercial
buildings. They can be full or partial. Sometimes they have high
ceilings and are easily observable from the outside; sometimes the
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ceilings are lower and less observable. In any event, there is no
evidence that the basement here could not have been easily discovered
by Penn–Ohio in a reasonable inspection.
Our review of the record reveals that the only alleged evidence
of fraudulent concealment is that American was aware that Penn–Ohio
was storing steel and did not advise it of the existence of the basement.
Contrary to appellant's argument, there is no record evidence that
Marsteller knew that Penn–Ohio was storing “dangerous” amounts of
steel on the floor. Appellant cites the deposition testimony of
Jennarong Montgomery, an employee of another lessee in the building,
in support. However, this witness merely testified that Marsteller came
to the site “maybe a couple times a week,” and most likely would have
seen Penn–Ohio “stacking steel there.” Neither he nor anyone else
testified that Marsteller knew that Queen or any other Penn–Ohio
employee had stacked dangerous amounts of steel prior to the
accident. Further, there is no evidence that Marsteller was in the
building at any time within three weeks prior to the accident.
In any event, there is no evidence that American concealed the
basement. There is no evidence that Penn–Ohio ever asked American
whether the floor on which it was storing steel had a basement beneath
it. There is no evidence that Penn–Ohio ever attempted to inspect the
floor or the area beneath it. Further, there is no evidence that Penn–
Ohio was prevented from inspecting or unable to inspect this area
during the five months it was in possession and control of the leased
premises prior to Queen's injury.
Contrary to appellant's argument, Penn–Ohio's owner Felix
(“Bud”) Hallsky did not testify that one “cannot determine” whether there
is a basement under the floor. He merely testified that when looking at
the building from the outside, it was not apparent that there were two
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levels. Further, contrary to appellant's argument, neither Hallsky nor
Penn–Ohio's employee Richard Perline testified that Penn–Ohio would
not have rented the space if either of them knew there was a basement
under the floor.
In Hendrix, 1 Ohio St.3d 205, 1 OBR 230, 438 N.E.2d 1149, the
Ohio Supreme Court held that even though evidence was presented
that the lessor under a commercial lease was aware of the existence of
defects at the property, the lessor was not liable for injuries resulting
therefrom. The court held: “[W]e are not persuaded that the allegations
regarding the lessor's knowledge of defects, even if established, would
[result in liability] in the context of a commercial lease.” Id. at 208.
Here, there is no evidence that the basement was defective.
Because the leased premises were the subject of a commercial lease
and were available for inspection, American had no duty to disclose it.
Without such a duty, there was no fraudulent concealment.
Currier, 187 Ohio App.3d 32, 2010-Ohio-198, ¶ 46-51.
{¶44} This reasoning is accurate and sound. Furthermore, it is bolstered by
the fact that Boatwright’s own testimony acknowledges that while he did not know of
the basement below bay 25, he was aware that other portions of the property
contained basements. (Boatwright Depo. 32-33). Penn-Ohio’s manager, Wilson,
also appeared to acknowledge that in addition to the tornado shelter door there was
another door on the outside that was below the building’s main floor. (Wilson Dep.
33). This would indicate that another basement area existed.
{¶45} Furthermore, while it is acknowledged that Penn-Ohio employees
testified that Kundel Industries did not want any of Penn-Ohio employees in the
spaces it leased, that fact did not prevent discovery of the basement areas. Penn-
Ohio could have asked Marsteller about additional basement areas in the facility. The
only area it asked about was the tornado shelter, which it leased.
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{¶46} Moreover, in a commercial lease setting, the lessee is in the best
position to know the purpose or anticipated use of the rental property. Thus,
common sense dictates that it is the lessee’s, not lessor’s, duty to determine if the
premises are suitable for the intended use.
{¶47} Therefore, based on all of the above and the Currier Court’s decision,
the trial court’s conclusion that the basement was not a defect and that there is no
evidence of fraudulent concealment is correct. This assignment of error lacks merit.
Third Assignment of Error
{¶48} “The trial court erred to the predjudice [sic] of the plaintiff by failing to
find that the lease imposed a duty on ASC and Martsteller [sic] to post signs
indicating the load limits of the floor.”
{¶49} The argument made under this assignment of error is based on the
language of the lease and the failure of ASC and Marsteller to post the floor’s weight
capacity. The lease stated that the landlord shall comply with all laws and other
public requirements affecting the leased premises. Following the accident, ASC was
cited for violating the OSHA requirement that mandated the posting of the floor’s
weight capacity. Thus, Boatwright is claiming that because the lease was breached
by ASC, ASC is liable for his injury.
{¶50} ASC counters by arguing that the only way that Boatwright can recover
under this breach of contract theory is if he was a third-party beneficiary to the
contract between Penn-Ohio and ASC. It contends he was not. ASC also directs
this court to the Currier decision which rejected the same type of breach of contract
argument.
{¶51} Starting with the Currier court’s resolution of this issue, it found no merit
with the breach of contract argument and explained:
Apparently aware that violations of such regulations cannot
serve as the basis for a negligence claim, see Sabitov v. Graines, 177
Ohio App.3d 451, 2008-Ohio-3795, 894 N.E.2d 1310, ¶ 27, appellant
argues that because the parties to the lease each agreed to comply
“with all laws, orders, ordinances, and other public requirements * * *
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affecting the Leased Premises,” American's alleged violation of the
Ohio Building Code and OSHA regulations rendered it negligent,
irrespective of whether it retained possession and control of the leased
premises.
While we recognize that a lessor may undertake a specific duty
by contract that he is not otherwise obligated to perform, the general
obligation in the subject lease does not refer to any specific duty or law.
Rather, it requires each party to comply with “all laws” affecting the
leased premises.
We note that the cases appellant cites in support merely held
that a landlord who undertakes a specific obligation under a lease may
be liable for its breach. None of these cases held that a promise to
comply with all laws affecting the leased premises results in negligence.
By virtue of the broad and general nature of the lease provision,
it does not bind the parties to any specific obligation. It merely confirms
what the law requires of all persons: compliance with the law. If we
were to adopt appellant's argument, virtually any violation of any law
remotely affecting the property committed by either the tenant or the
landlord would result in that party's liability in negligence. There is no
indication that the parties intended such a result, and we will not impose
it on them.
We also observe that in Hernandez v. Martin Chevrolet, Inc.
(1995), 72 Ohio St.3d 302, 649 N.E.2d 1215, the Ohio Supreme Court
held that “a violation of OSHA does not constitute negligence per se.”
Id. at 304. Further, “‘The Ohio Basic Building Code is an administrative
regulation, not a legislative enactment, and, as such, any violation
would not constitute negligence per se.’” (Emphasis omitted.)
Zimmerman v. St. Peter's Catholic Church (1993), 87 Ohio App.3d 752,
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754, 622 N.E.2d 1184, quoting the trial court's summary-judgment
entry.
Finally, in Hendrix, 1 Ohio St.3d 205, 1 OBR 230, 438 N.E.2d
1149, the Ohio Supreme Court held: “The finding that the lessor was
out of possession and control has been held to relieve the landlord from
liability for damages resulting from the condition of the premises even in
cases where the landlord agreed to make repairs.” (Emphasis added.)
Id. at 207.
Thus, even if American had agreed to comply with these specific
regulations, as a landlord out of possession and control, it would not be
liable for damages resulting from the condition of the leased premises.
Currier, 187 Ohio App.3d 32, 2010-Ohio-198, ¶ 37-43.
{¶52} Without discussing breach of contract/third-party beneficiary law, the
Currier decision provides sufficient justification for finding no merit with this
assignment of error. Specifically, the discussion of Hendrix and the fact that a
landlord out of possession is not liable for the condition of the premises even where
the landlord agrees to make repairs, suggests that violating an OSHA requirement
would not render the landlord liable.
{¶53} However, even if we are to look at the breach of contract/third-party
beneficiary law, Boatwright’s claim still fails. Only the parties to a contract or third-
party beneficiaries to the contract can maintain an action for damages that is based
upon the breach of a contract. Here, the contract, which was a lease, was between
Penn-Ohio and ASC. Boatwright clearly was not a party to the contract. Thus, in
order for him to be able to maintain the breach of contract claim, he must be a third-
party beneficiary to the contract. Ohio uses the “intent to benefit” test to determine
whether a third-party is an intended beneficiary. That test requires the promisee to
have an intent to benefit a third party; the third party cannot merely be an “incidental
beneficiary.” Huff v. FirstEnergy Corp., 130 Ohio St.3d 196, 2011-Ohio-5083, 957
N.E.2d 3, ¶ 11-12. There must be evidence that the contract was intended to directly
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benefit that third party. Id. “Generally, the parties' intention to benefit a third party
will be found in the language of the agreement.” Id.{¶54} As previously indicated, the contract is for the lease of certain bays in a
warehouse. There is no evidence, in the contract or elsewhere, that the contract was
intended for Boatwright’s benefit. Thus, he cannot meet the intent to benefit test. As
such, his breach of contract theory fails. This assignment of error lacks merit.
Fourth Assignment of Error
{¶55} “The trial court erred to the prejudice of appellant in finding that William
Marsteller had no individual liability.”
{¶56} The trial court specifically found that Marsteller was not individually
liable. It reasoned that every action he took was done solely in his capacity as
president and employee of ASC, the landlord. 01/30/12 J.E.
{¶57} This finding is correct. The Ohio Supreme Court has explained that
“the act of an agent is the act of the principal within the course of the employment
when the act can fairly and reasonably be deemed to be an ordinary and natural
incident or attribute of the service to be rendered, or a natural, direct, and logical
result of it.” Tarlecka v. Morgan, 125 Ohio St. 319, 324, 181 N.E. 450 (1932). The
facts of this case show that Marsteller was acting in his capacity as president when
he entered into the lease for bay 25 with Penn-Ohio.
{¶58} That said, Marsteller can be sued in his individual capacity. An injured
party may sue the principal, the agent or both. Natl. Union Fire Ins. Co. of Pittsburgh,
PA v. Wuerth, 122 Ohio St.3d 594, 2009-Ohio-3601, 913 N.E.2d 939, ¶ 22. However,
a principal is vicariously liable only when an agent could be held directly liable. Id.Corporations are liable for the acts of their agents in the course of their employment,
in the same manner and to the same extent as private individuals. Cleveland,
Columbus & Cincinnati RR. Co. v. Keary, 3 Ohio St. 201 (1854).
{¶59} The problem here is that Boatwright has failed to show that Marsteller
owed him a duty. Boatwright consistently discusses the fact that Marsteller should
have told Penn-Ohio about the basement under bay 25. The fact that Marsteller
allegedly did not disclose the basement does not trigger personal liability. As
discussed above, nothing in the law suggests that Marsteller had a legal duty to
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disclose the basement. Thus, it does not appear that Marsteller, individually, was
under any legal duty to disclose the basement. The analysis in the prior assignments
of error clearly demonstrates that this is a commercial lease with a landlord out of
possession and the doctrine of caveat emptor applies.
{¶60} Thus, the trial court’s decision on this issue was correct. This
assignment of error lacks merit.
Fifth Assignment of Error
{¶61} “The trial court erred in finding that the Ohio Bureau of Workers’
Compensation has no claim because the defendants are not liable to plaintiff as a
matter of law.”
{¶62} In the Worker’s Compensation context, the right of the bureau to
recover its subrogation interest is an independent right, but that right is subrogated in
the sense the bureau can recover from the claimant (Boatwright) and/or third party
(ASC and/or Marsteller) only if the third party is liable to the claimant in tort. Ohio
Bur. of Workers’ Comp. v. McKinley, 130 Ohio St.3d 156, 2011-Ohio-4432, 956
N.E.2d 814, ¶ 23.
{¶63} As aforementioned, ASC and Marsteller are not liable to Boatwright for
his injuries. Thus, the trial court correctly concluded that the Ohio Bureau of
Workers’ Compensation has no viable subrogation claim in this instance. This
assignment of error lacks merit.
Conclusion
{¶64} For the foregoing reasons, the judgment of the trial court is hereby
affirmed.
Waite, P.J., concurs.
DeGenaro, J., concurs.