A contractual “prevailing party” provision might not require that a party prevail on all issues in a lawsuit, according to one recent Cuyahoga County, Ohio decision in which Frantz Ward’s client recovered its attorneys’ fees because it prevailed on the “main issue” in the case.
In Simbo Properties, Inc. v. M8 Realty, LLC, Case No. CV-16-856616, Cuyahoga County Court of Common Pleas, the Court awarded attorneys’ fees to the defendant after determining that the defendant was the “prevailing party,” despite the jury having awarded “some relief” to the plaintiff. The plaintiff in the case was the landlord under a commercial lease. After the tenant had moved out, the landlord asserted several claims against the tenant: (1) for unpaid rent on a theory that the lease had automatically renewed because the tenant had failed to give proper notice of non-renewal; (2) for alleged damage to the property before the tenant had vacated; and (3) for failure to pay real estate taxes that were due under the lease. The tenant did not dispute that the taxes were due and tried to pay them prior to trial, but the landlord insisted on also being paid the rent that it claimed was due, along with the alleged damages. Following the close of the evidence, the trial judge granted a directed verdict to the defendant on the property damage claim, but allowed the unpaid rent claim and the claim for real estate taxes to go to the jury. The jury found in favor of the defendant on the unpaid rent claim and in favor of the plaintiff on the taxes.
Both sides then moved for legal fees under a “prevailing party” provision in the lease. The plaintiff argued that under Thomas v. City of Cleveland, 176 Ohio App.3d 401 (8th Dist. 2008), it was the prevailing party because it had obtained “some relief” at trial – the claim for real estate taxes. The defendant countered that it was the prevailing party, because it had prevailed on the “main issues” in the case – the claims for unpaid rent and property damages claim. The Court agreed with the defendants that the proper inquiry is what the primary focus of the case was:
[The] applicable standard to determine the prevailing party in this situation is the ‘main issue’ standard outlined in EAC Properties, LLC v. Brightwell, 10th Dist. Franklin No. 13AP-773, 2014-Ohio-2078. Under this standard and as analogous to the situation in EAC Properties, this court finds that although plaintiff received some monetary relief, the defendant was nevertheless the prevailing party overall because the defendant prevailed on plaintiff’s main claim which clearly was count I for rent owed as evidenced by the significant focus on this main issue throughout the litigation and during the trial.
This case provides a valuable lesson in litigation in which the parties have a contractual fee shifting provision. Although the plaintiff may have thought that it was assured of a fee recovery because it had one claim that was not seriously contested at trial, because it lost on the main issue, it will now be required to pay all of the defendant’s legal fees. Frantz Ward attorney James Niehaus represented the defendant in this action. Read the full decision.