Joseph J. Freed & Associates, Inc. v. Cassinelli Apparel Corp.

Per Curiam. The central issue involved in the cause sub judice is whether the trial court acted properly in ordering a forfeiture of the leased premises by finding a material breach of the lease covenant requiring uniformity of business hours. More specifically, we must determine whether the trial court abused its discretion in weighing the equities of this cause in favor of a forfeiture of the leased premises. The appellant submits the usual equitable maxims in urging a reversal of the decision below, i.e., that equity abhors a forfeiture; that a forfeiture clause, when ambiguous, must be strictly construed against the lessor (in favor of denying a forfeiture); and that the equities weigh against forfeiture since the breach was immaterial and non-substantial. The appellee generally agrees with the equitable considerations posited by appellant, but argues that none of these considerations is applicable here which would necessitate a reversal of the lower court rulings. In reviewing the lease agreement, and in particular, Section 10.1 as set forth above, it is readily apparent that the terms of the agreement extend the right of forfeiture to “any default by tenant.” As pointed out by the court of appeals below, “* * * the term ‘default’ is not possessed of any ambiguity or of any special definition in the context in which it appears in the lease.” Therefore, it is reasonable to conclude that because the appellant’s obligation to remain open for business in accordance with the policy set forth in the lease is plain and unambiguous, the appellee was afforded a contractual right of forfeiture in the event that appellant breached its obligations under the lease by deviating from the uniform business hours established by the lessor. The fact that the subject lease does afford the lessor the right of forfeiture for the breach in issue does not necessarily require affirmance of the lower court decisions. As indicated before, the crucial issue becomes whether the trial court abused its discretion in weighing the equities in favor of appellee and enforcing the contractual right of forfeiture. Our review of the record reveals that there is competent evidence to support appellant’s assertions that its reduction in business hours was a minor deviation from the policy established by the lessor, and that such a reduction of hours was in the best economic interests of the appellant. On the other hand, the record indicates the necessity of a shopping mall enterprise to maintain uniform hours in order to further the collective success of the mail’s tenants. Likewise, the lease itself contained a mechanism whereby the lessee had the right to submit any objection concerning business hours to a retail merchant’s association and to have the dispute resolved by the association in accordance with its by-laws. There is no evidence whatsoever that the appellant even attempted to seek the assistance of the retail merchant’s association. Instead, appellant chose to unilaterally reduce its business hours during the winter months. While there is evidence to support the arguments submitted by both parties to this controversy, we cannot find that the lower courts erred in [97] finding the balance of equities in favor of the appellee, nor can we find that such a disposition amounted to an abuse of discretion on the part of the trier-of-fact. As this court stated in State v. Adams (1980), 62 Ohio St. 2d 151, 157 [16 O.O.3d 169]: “The term ‘abuse of discretion’ connotes more than an error of law or judgment; it implies that the court’s attitude is unreasonable, arbitrary or unconscionable. Steiner v. Custer (1940), 137 Ohio St. 448 [19 O.O. 148]; Conner v. Conner (1959), 170 Ohio St. 85 [9 O.O.2d 480]; Chester Township v. Geauga Co. Budget Comm. (1976), 48 Ohio St. 2d 372 [2 O.O.3d 484].” See, also, Blakemore v. Blakemore (1983), 5 Ohio St. 3d 217, 219. Given this precise definition we cannot hold that the trial court abused its discretion by ordering a forfeiture of the leasehold. Our affirmance of the lower courts takes into account several key factors. First, in the cause sub judice, we are dealing with a commercial leasehold where the parties appear to have entered an agreement in equal bargaining positions. Second, the lease in issue provided that “any default” can result in a forfeiture upon written notice by the lessor coupled with a failure to cure the default by the lessee in the time frame set forth in the lease agreement. In the instant case, this procedure was undertaken in accordance with the terms of the lease. Third, the appellant did not attempt to obtain approval for shorter business hours with the retail merchant’s association, as was provided in the lease. Given the state of the record before us, we hold that the trial court’s order of a forfeiture was not unreasonable, arbitrary or unconscionable, and therefore we affirm the decision of the court of appeals upholding that order. Judgment affirmed. Celebrezze, C.J., Sweeney, Locher, Holmes, Douglas and Wright, JJ., concur. C. Brown, J., dissents.