Lamar Advantage GP Co., L.L.C. v. Patel, 2012-Ohio-3319.

            In a Court of Appeals of Warren County case, Sachin Patel appealed the decision of the Warren County Court of Common Pleas decision granting summary judgment to Lamar Advantage GP Company, L.L.C..  The case began in November of 2008 when Patel leased a billboard from Lamar Co. to promote a Motel 6 by signing an advertising contract with them.  In the contract, Patel agreed to 38 payments of $1,107.69 every four weeks for the first year, and an increased rate for the two years after. 

            On January 7, 2009, Patel wrote a check in the amount of $4,147.69, of which $1,107.69 went to the billboard's rent and $3,040 went to production costs.  "On March 23, 2009, Patel discovered damage to the billboard.  On April 2, 2009, Patel notified Lamar Co. of the damage, and according to Patel, Lamar Co. refused to repair the sign until Patel paid rent for February and March."  Patel then denied payment to Lamar Co., which prompted Lamar Co. to file suit in the amount of $4,430.76 for back rent.  Lamar Co. then dismissed their action on February 9, 2010, opting instead to "invoke the contract's acceleration clause and file suit in the Warren County Court of Common Pleas for the entire amount due under the contract."  The amount in question this time was $18,963.63 for damages, court costs, litigation and attorney fees and interest at 18% annually. 

            Both Lamar Co. and Patel filed for summary judgment, Patel claiming that he signed the contract as an agent for Motel 6, which was owned by Shine Hospitality, L.L.C. and was therefore protected under them.  Lamar Co. claimed that Patel had breached the contract and was personally responsible for the debt because "he signed the contract in his individual capacity."  The trial court sided with Lamar Co. and granted summary judgment in their favor in May of 2011, explaining that Patel had not indicated he was signing the contract as an agent and that "Motel 6" was not a corporate entity, but simply an unregistered trade name.  The court therefore awarded Lamar Co. the $18,963.63 they asked for under the acceleration clause in addition to "$8,380.25 in attorney fees, $450.57 in litigation expenses, court costs, and interest at 4% per annum from February 2, 2009, the date of the breach, until paid in full."

            Patel then appealed, assigning two errors to the trial court's decision.  First, he argued that Lamar Co. should not have received summary judgment against him, and second, that Lamar Co. wrongfully received attorney fees, costs and interest.  Summary judgment can only be rendered when the decision is based solely on a matter of law, not of material fact.  Patel claimed that the ruling of summary judgment against him was improper because he did not sign the contract as himself, but as an agent of the corporation "Motel 6."  However, in order "to avoid personal liability, an agent must disclose to the party with whom he is dealing both the agency relationship and the identity of the principal."  Furthermore, to confirm that he was acting as merely an agent and not as an individual advertiser, Patel would have needed to sign the document as such; ""the typical format to avoid individual liability is 'company name, individual's signature, individual's position.'"  Had Patel signed the document "On behalf of Motel 6, Sachin Patel, Agent," he may have been able to dispute his personal liability, but as he did not provide evidence to the contrary, Patel's claim was overruled.

             Patel's next argument intended to reverse the trial court's decision for summary judgment was that he did not in fact materially breach the contract with Lamar Co..  "A 'material breach of contract' is a failure to do something that is so fundamental to a contract that the failure to perform defeats the essential purpose of the contract or makes it impossible for the other party to perform."  Patel claims he did not materially breach the contract since he was only one payment late before discovering the damage to the billboard and being excused from payment on March 23, 2009.  Patel claimed that he was only a month in arrears because after signing the advertising contract with Lamar Co. in November of 2008, they both agreed that he would share monthly rent with a Clarion hotel.  Patel asserted then that his $1,107.69 payment made on January 7, 2009 was for half the rent for the months of both January and February 2009.  He concludes therefore, that by March 23, 2009, when he discovered the damage to his billboard, that he was only one payment behind. 

            Patel also states that even in the event that he "was solely responsible for the rent, Lamar Co.'s monthly invoices indicated that January's rent was not due until February 4, 2009, February's rent was not due until March 4, and rent for March was not due until April 1. "  By that logic, Patel was late with February's rent, but was then excused from payment on March 23, 2009 when he discovered the damage to the billboard.  Patel concludes that in either event, his one past due payment does not constitute a material breach of contract.

After review, the court found that neither argument created a material issue of fact to be considered.  The court notes that there was no other hotel mentioned in the contract, nor was there a mention of fee-splitting.  

            Regardless, Patel entered into a contract with an advertiser where the primary exchange was monetary payment for use of an advertising tool, the billboard.  Patel admittedly violated this fundamental term of the agreement and additionally would not lose money if the contract was terminated, did not act in good faith by waiting two weeks to notify Lamar Co. of the damage to the billboard and would not be permitted to cure his breach.  Due to these elements, the court finds that the trial court did not err in granting summary judgment to Lamar Co. for both the breach of contract and personal liability claims.  Patel's first assignment of error was accordingly overruled.

            In Patel's second assignment of error, he argues that the trial court erred when they awarded attorney fees, costs and interest to Lamar Co..  Patel claimed that the attorney fees were not proven reasonable by Lamar Co., and should have been denied on that basis.  However, as a result of "Bittner v. Tri-County Toyota, Inc., 58 Ohio St. 3d 143, 146 (1991) 'unless the amount of fees determined is so high or low as to shock the conscience, an appellate court will not interfere.'"  Furthermore, in these circumstances, the contract clearly stipulated that: "Advertiser shall pay Lamar all costs and expenses of exercising its rights under this contract, including reasonable attorney's fees of not less than 25% of the amount due, or $250.00, whichever is greater, and all reasonable collection agency fees."  Lamar Co.'s counsel went on to explain that the fees were warranted, given that he only charged $195 an hour for the work and that it was laborious in nature.  The trial court originally reduced the attorney's fees from $11,103.22 to $8,380.25 as several of the charges related to a previous case in Hamilton County, not the current case in Warren County.  The court of appeals then determined that he trial court did not abuse their discretion in the award of attorney fees since Patel and his counsel had adequate time to assess and challenge the fees originally. 

              Patel also separately challenged the awarding of prejudgment interest to Lamar Co. for court costs, attorney fees and litigation at the rate of 4%.  He claims that the interest did not begin to accumulate until February 12, 2010 when the claim was filed and that it was not due until judgment was rendered.  The court of appeals determined that the trial court had indeed abused its discretion in awarding prejudgment interest by awarding interest from February 2, 2009 on.  The court thereby determined that the trial court's judgment was affirmed in part, reversed in part and remanded.