Opinion

Joseph Bros. Co., L.L.C. v. Dunn Bros., Ltd.

2019 Ohio 4821

Court: Ohio Court of Appeals
Filed: Nov 22, 2019
Status: Published
On the bench: Osowik
Cited by: 3 cases
Authority: More cited than 48.7%

The opinion

[Cite as Joseph Bros. Co., L.L.C. v. Dunn Bros., Ltd., 2019-Ohio-4821.]

IN THE COURT OF APPEALS OF OHIO

SIXTH APPELLATE DISTRICT

LUCAS COUNTY

Joseph Brothers Company, LLC Court of Appeals No. L-18-1229

Appellant Trial Court No. CI0201404624

Dunn Bros., Ltd., et al. DECISION AND JUDGMENT

Appellee Decided: November 22, 2019

*****

Peter R. Silverman, Mark D. Wagoner and Matthew T. Kemp,

for appellant.

Thomas W. Heintschel and Douglas W. King, for appellee.

*****

OSOWIK, J.

Introduction

{¶ 1} This case concerns a dispute over an agreement that created an access

license and a sign easement. The agreement was created in 1985 between Joseph

Brothers Company, a predecessor to the plaintiff-appellant, Joseph Brothers Company,

LLC, and Dunn Brothers, a predecessor to the defendant-appellee, Dunn Bros., Ltd.

{¶ 2} Generally, the access license allowed Dunn Brothers and its customers to

traverse across the property of Joseph Brothers Company. The agreement also allowed

Dunn Brothers to install a sign identifying its auto sales business on Joseph Brothers’

property.

{¶ 3} On November 17, 2014, the Joseph Brothers Company, LLC (hereinafter

“appellant”) filed a seven-count complaint in the Lucas County Court of Common Pleas

against Dunn Bros., Ltd. (hereinafter “Dunn”) and Toledo Sign Company. As against

Dunn, appellant filed an action for a declaratory judgment that the access license had

been extinguished through “abandonment” and/or that it terminated by its own terms

(Count 1); an action for a declaratory judgment that the sign easement “must be

restricted” (Count 2); an action for a declaratory judgment that the sign easement has

been terminated and that the sign must be removed (Count 3); an action to quiet title,

pursuant to R.C. 5303.01 (Count 4); and an action in trespass with respect to the non-

conforming sign (Count 5). Appellant filed a separate trespass claim against Toledo Sign

Company (Count 6) and a claim as to both defendants for punitive damages (Count 7).

Appellant voluntarily dismissed Toledo Sign from the case on July 6, 2015.

{¶ 4} Both parties filed motions for summary judgment. On October 1, 2018, the

trial court found that there were no material questions of fact that would permit

termination of either the access license or the sign easement and that Dunn was entitled to

judgment as a matter of law as to all claims asserted against it. As set forth below, we

affirm, in part, and reverse, in part.

The 1985 Agreement

{¶ 5} In 1985, the Joseph Brothers Company owned commercial property to the

south of, and bordering, State Route 2 in Oregon, Ohio. State Route 2 (a.k.a. Navarre

Avenue) is a “main commercial thoroughfare.” Joseph Brothers Company operated a

commercial shopping center on the property, which stretched from State Route 2 to

Dustin Road. Dustin Road is one block to the south, and runs parallel to State Route 2. It

owned an additional parcel of land to the south of Dustin Road. On December 27, 1985,

it sold that additional parcel to Dunn Brothers. Dunn Brothers purchased the property for

the purpose of operating its car dealership. Thus, after the sale, and from north to south,

the order was State Route 2, the Joseph property, Dustin Road, the Dunn property.

{¶ 6} The Dunn property had no direct access to State Route 2. Therefore, in

connection with the sale, the parties entered into an agreement, titled “License

Agreements,” (hereinafter “the Agreement”) consisting of two parts. One part granted

Dunn Brothers and its customers “continuous, uninterrupted access” across the Joseph

property from State Route 2 to access the Dunn property (the “access license”). The

second part granted Dunn Brothers an “irrevocable and perpetual license” to install an

“identification sign” on the Joseph property, near State Route 2, so that it could identify

its car dealership (the “sign license”). The Agreement is set forth in full below:

LICENSE AGREEMENTS

JOSEPH BROTHERS COMPANY, an Ohio general partnership,

hereinafter referred to as “Grantor”, in consideration of the purchase by the

below Grantee from Grantor of certain real property describe on Exhibit

“A” attached hereto and made a part hereof, which said property fronts on

Dustin Road, a dedicated thoroughfare in the City of Oregon, Lucas

County, Ohio (the “Benefitted Property”), does hereby grant to DUNN

BROTHERS, its employees, customers, and invitees, an Ohio general

partnership, the purchaser of the Benefitted Property, hereinafter referred

to as “Grantee”, a license for continuous, uninterrupted access to and

from the Benefitted Property across Dustin Road to State Route 2 (Navarre

Avenue) for vehicular and pedestrian traffic over and across a certain

portion of real estate owned by Grantor described on Exhibit “B” attached

hereto (the “Burdened Property”), which certain portion is fully described

on Exhibit “C” attached hereto and designated as “Access License” on the

Plot Plan attached hereto as Exhibit “D” (the “Access License”). The

Access License shall remain in effect so long as Grantee is the record

owner of the Benefitted Property.

The Access License shall at all times be maintained by Grantor and

Grantor shall keep it reasonably free of debris, snow and other

impediments. The Access License may be relocated from time to time by

Grantor within the Burdened Property, provided it is at all times twenty

(20) feet in width and provides access to and from State Route 2 (Navarre

Avenue) from the Benefitted Property consistent with this Agreement.

Grantor also hereby grants to Grantee an Irrevocable and perpetual

license to erect and maintain a single pole identification sign advertising

Grantee’s business on the Benefitted Property (“Sign License”) over, under

and upon the area so designated on Exhibit “D” (“Sign License Area”) for

the purpose of identifying Grantee’s business operations on the Benefitted

Property. Any such sign shall be installed on the Sign License Area in

conformance with all applicable codes and ordinances of the City of

Oregon and shall contain a maximum of one hundred twenty-five (125)

square feet on each face.

The Sign License shall run with the land and be binding upon and

inure to the benefit of Grantor and Grantee and their respective successors

and assigns, and the Access License shall be binding upon and inure to the

benefit of Grantee and Grantor, and Grantor’s successors and assigns.

IN WITNESS WHEREOF, the Grantor has executed this Agreement

on the 27th day of December, 1985.

JOSEPH BROTHERS COMPANY, an

Ohio general partnership

The dispute over the Dunn’s right of access

{¶ 7} According to appellant, Dunn Brothers transferred the Dunn property (also

referred to herein as the “benefited property”) to Dunn on August 15, 1997. 1 Appellant

claims that, because the access license remained in effect only “so long as” the “Grantee”

(defined as “Dunn Brothers * * * an Ohio general partnership”) was the “record owner”

of the benefited property, the access license terminated upon Dunn Brothers’ transfer of

the property. Appellant argues that Dunn is “merely a successor” to Dunn Brothers, with

“no rights under the Access License.” In further support of its argument, appellant points

to the absence of any “successor and assign” language with respect to Dunn Brothers’

rights under the access license. That is, the Agreement provides that the access license

shall be binding upon and inure to the benefit of “Grantee and Grantor, and Grantor’s

successors and assigns.” By contrast, the Agreement provides that the sign license shall

run with the land and be binding upon and inure to the benefit of “Grantor and Grantee

and their respective successors and assigns.” Appellant claims that the absence of

language including the grantee’s successors and assigns—with respect to the access

license—was purposeful and “reinforces the conclusion that the [access license] is no

longer in effect because Dunn [Brothers] no longer owns the [benefited] property.”

Records from the Lucas County Recorder’s Office confirm that “DUNN BROTHERS

AN OHIO GENERAL PARTNERSHIP” transferred parcel 4423337, known as 3000

Dustin Road, Oregon, Ohio for $0 on August 15, 1997 to “DUNN BROS., LTD., AN

OHIO LIMITED LIABILITY COMPANY.”

{¶ 8} In addition, appellant argues that the access license was “extinguished

through abandonment and a material change in the circumstances giving rise to the

creation of the [Access] License.” According to appellant, the city of Oregon constructed

a “new” public roadway, called Harbor Drive, in 1995 that connects State Route 2 and

Dustin Road and runs adjacent to, and just west of, the Dunn Property. In its complaint,

appellant claimed that “the purpose of [the] Access License was to allow traffic to

access” the Dunn Property because “there was no direct public street access” from State

Route 2 to the Dunn Property. With the construction of Harbor Drive, appellant claims

that an issue of fact exists with respect to whether the purpose of the access license has

been rendered obsolete.

{¶ 9} In response, Dunn maintains that the access right was not extinguished

“merely because of a change in ownership.” It stresses that the sole principles of each

organization (Thomas Dunn and James Dunn) remained the same and that the

reorganization from partnership to limited liability company was nothing more than a

“natural evolution [that occurred] when limited liability companies were recognized by

Ohio statute.” Dunn adds that the intent of the contracting parties was to provide a right

of access “as long as the Dunns owned the property and dealership.” With respect to the

creation of Harbor Drive, Dunn argues that the access license still serves the purpose for

which it was created and that it was neither abandoned nor rendered obsolete.

{¶ 10} The trial court found that Dunn was entitled to judgment as a matter of law

as to both issues. That is, it found that the change from partnership to limited liability

company did not result in a change in ownership of the property “for purposes of the

access agreement” because both entities are owned by the same individuals, i.e., James

Dunn and Thomas Dunn and therefore there was no basis “for termination of the access

license.” Similarly, it found that “[t]he fact that there is now a second manner of access

to Dunn’s property does not negate that the fact that access can still be obtained by using

[appellant’s] property [and] [t]herefore the purpose of the license still exists.”

The dispute over the sign

{¶ 11} Dunn’s “irrevocable and perpetual” right to “erect and maintain” a sign on

appellant’s property was subject to five restrictions. It was limited to (1) a “single pole

identification sign” (2) “advertising [Dunn’s] business on the Benefited property;”

(3) “over, under and upon” a designated area of appellant’s property. The sign was also

required to (4) conform “with all applicable codes and ordinances of the City of Oregon”

and (5) “contain a maximum of * * * [125] square feet on each face.”

{¶ 12} In 1986, Dunn Brothers installed a sign along Navarre Avenue, on the

property of then-Joseph Brothers, appellant’s predecessor. The two-sided sign identified

“Dunn Chevrolet Buick” on each side and was supported by two cylinder-shaped poles,

not one pole, as provided by the Agreement.

{¶ 13} In 2012, Dunn hired Toledo Sign to replace the original sign, and the

project was completed in early 2013. Toledo Sign sales representative, Dana Fairchild,

who oversaw the project, testified during his deposition that the project entailed removing

the old sign and replacing it with two separate, smaller signs, one on top of the other.

The upper sign has a “fixed” message (identifying “Dunn” as a Chevrolet and Buick

dealership), and the lower sign is an electronic message board. The original poles (or “I-

beams,”) that supported the old sign remain in place but were shortened, and the poles

were disguised by adding modular-looking, aluminum “coverings.” The coverings

provide no structural support and are merely “fluff.” Dunn paid Toledo Sign $87,000 for

the project.

{¶ 14} Appellant complains that the “visual footprint” of the new sign is “far

greater than the old sign.” It argues that the combined square footage of the upper sign,

the lower sign and the “face” of the coverings, which it calls “pillars,” should be included

for purposes of calculating the square footage of each sign face. If so, appellant claims

that “the dimensions add up to at least 222 square feet - far more than the 125 square feet

allowed by the Sign Easement.” Appellant argues that while the upper sign is

“reasonably consistent with the old sign,” the lower board is “garish.” Appellant asserts,

and Dunn does not dispute, that the lower sign is capable of displaying “moving pictures,

text, and other advertising information.” Appellant claims that Dunn never sought

approval for the new sign prior to erecting it, and that it immediately objected to the new

sign by filing the instant lawsuit.

{¶ 15} Dunn counters that the time to challenge the two pole sign has long since

expired, either by operation of the statute of limitations set forth in R.C. 2305.06 or

pursuant to the doctrine of laches and that the new sign is otherwise compliant with the

terms of the sign easement.

{¶ 16} In its decision, the trial court found that appellant waived its right to

challenge the two pole violation of the sign easement, that the new sign otherwise

complied with the terms of the agreement and therefore that the sign easement

remained in full force and effect.

{¶ 17} The trial court also concluded that appellant could not maintain a common

law trespass claim against Dunn, as a matter of law, because Dunn held an easement to

install and maintain a sign and therefore had authority to enter the property.

{¶ 18} Appellant appealed the trial court’s October 1, 2018 judgment and raises

three assignments of error for our review:

First Assignment of Error: The trial court erred in granting

summary judgment for Dunn Brothers and in failing to grant summary

judgment for Joseph Brothers with respect to termination of the access

license.

Second Assignment of Error: The trial court erred in granting

summary judgment for Dunn Brothers and in failing to grant summary

judgment for Joseph Brothers with respect to Dunn’s violation of the sign

license.

Third Assignment of Error: The trial court erred in granting

summary judgment for Dunn Brothers on Joseph Brothers’ trespass claim.

10.

Standard of Review

{¶ 19} Appellate review of a summary judgment is de novo. Grafton v. Ohio

Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). We employ the same

standard as the trial court, without deference to it. Lorain Natl. Bank v. Saratoga Apts.,

61 Ohio App.3d 127, 129, 572 N.E.2d 198 (9th Dist.1989). A motion for summary

judgment may be granted only when it is demonstrated (1) that there is no genuine issue

as to any material fact; (2) that the moving party is entitled to judgment as a matter of

law; and (3) that reasonable minds can come to but one conclusion, and that conclusion is

adverse to the party against whom the motion for summary judgment is made, who is

entitled to have the evidence construed most strongly in his favor. Harless v. Willis Day

Warehousing Co., 54 Ohio St.2d 64, 67, 375 N.E.2d 46 (1978), Civ.R. 56(C).

{¶ 20} When seeking summary judgment, a party must specifically delineate the

basis upon which the motion is brought and identify those portions of the record that

demonstrate the absence of a genuine issue of material fact. Dresher v. Burt, 75 Ohio

St.3d 280, 293, 662 N.E.2d 264 (1996). When a properly supported motion for summary

judgment is made, an adverse party may not rest on mere allegations or denials in the

pleadings, but must respond with specific facts showing that there is a genuine issue of

material fact. Civ.R. 56(E); Riley v. Montgomery, 11 Ohio St.3d 75, 79, 463 N.E.2d 1246

(1984). A “material” fact is one which would affect the outcome of the suit under the

applicable substantive law. Russell v. Interim Personnel, Inc., 135 Ohio App.3d 301,

304, 733 N.E.2d 1186 (6th Dist.1999), citing Anderson v. Liberty Lobby, Inc., 477 U.S.

11.

242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When reviewing a ruling on summary

judgment, an appellate court restricts its consideration to the same evidentiary materials

that were properly before the trial court at the time it ruled on the summary judgment

motion. Guernsey Bank v. Milano Sports Enters., LLC, 177 Ohio App.3d 314, 2008-

Ohio-2420, 894 N.E.2d 715, ¶ 30 (10th Dist.).

The rights created by the Agreement

{¶ 21} We first address the terms “access license” and “sign license,” as set forth

in the Agreement. The construction of an instrument of conveyance is a question of law,

which the appellate court reviews under a de novo standard of review. Walbridge v.

Carroll, 172 Ohio App.3d 429, 2007-Ohio-3586, 875 N.E.2d 144 (6th Dist.), ¶ 16.

{¶ 22} Generally, an easement is defined as “[a]n interest in land owned by

another person, consisting in the right to use or control the land, or an area above or

below it, for a specific limited purpose (such as to cross it for access to a public road).”

Chesapeake Exploration, L.L.C. v. Buell, 144 Ohio St.3d 490, 2015-Ohio-4551, 45

N.E.3d 185, ¶ 38, quoting Black’s Law Dictionary at 622. An “interest in land” is “far

broader than ownership of property and encompasses an interest in using the land, such

as an easement.” Id.

{¶ 23} A license “is a privilege given to an individual to do an act upon the land of

another without possessing any interest therein and is usually terminable at the will of the

licensor.” (Emphasis added.) Cambridge Village Condominium Assn. v. Cambridge

Condominium Assn., 139 Ohio App.3d 328, 333, 743 N.E.2d 954 (11th Dist.2000), citing

12.

Mosher v. Cook, 62 Ohio St.2d 316, 317, 405 N.E.2d 720 (1980). “If the parties intend

for an agreement to be permanent, the license is said to be coupled with an interest.”

Dalliance Real Estate, Inc. v. Covert, 11th Dist. Geauga No. 2013-G-3139, 2013-Ohio-

4963, ¶ 33. “A license coupled with an interest becomes irrevocable, meaning that it is

no longer terminable at the will of the licensor, and constitutes a right to do the act rather

than a mere privilege to do it. * * * An irrevocable license is said to be an easement

rather than a license.” Cambridge Village at 333-334.

{¶ 24} The distinction between a license and an easement (i.e., a license coupled

with an interest), was recently explained as follows:

There are several distinguishing characteristics between an easement

and a license: a license is terminable at the will of the licensor, an

easement is not; a license cannot be assigned, and does not pass at death; a

license terminates upon conveyance of the land; a license is an agreement,

binding only on the parties to it; an easement is an interest in real property

which runs with the land. Falcone Bros., Inc. v. Pawmew, Inc., 5th Dist.

Stark No. 2016CA00209, 2017-Ohio-6958, ¶ 21, quoting Weir v.

Consolidated Rail Corp., 12 Ohio App.3d 63, 465 N.E.2d 131 (8th

Dist.1983).

{¶ 25} In this case, the rights created under the Agreement were irrevocable. That

is, Dunn Brothers’ right to access Joseph Brother’s property and its right to install a sign

were not terminable at the will of Joseph Brothers. The irrevocable nature of the rights

13.

created by the Agreement supports the conclusion that both the “the access license” and

the “sign license” were licenses coupled with an interest (or easements). On the other

hand, the “access license,” as discussed in greater depth with respect to appellant’s first

assignment of error, was not “assignable,” but rather was terminable upon the

conveyance of the land by Dunn Brothers, which is indicative of a mere license. Given

that the access right has attributes of both a license and a license coupled with an interest,

we use the language designated by the original parties to the agreement, i.e., an “access

license,” with the caveat that it created an interest in the property in favor of Dunn

Brothers and that that interest was not revocable by Joseph Brothers. See, e.g., Schlabach

v. Kondik, 7th Dist. Harrison No. 16HA017, 2017-Ohio-8016, ¶ 33 (Describing the

plaintiff’s interest in a lease as “a hybrid” with attributes of an easement and a license).

{¶ 26} By contrast, the right to install the sign was both irrevocable and freely

assignable, by Dunn Brothers, i.e., it “ran with the land.” Therefore, and as addressed

with respect to appellant’s second assignment of error, the right to erect a sign is a license

coupled with an interest. For ease, we refer to it as an “easement,” and we note that

while appellant challenged that designation before the lower court, it now concedes that

the agreement created a sign easement.

The access license terminated upon the transfer of the benefited

property by Dunn Brothers to Dunn

{¶ 27} We first address appellant’s argument that the transfer of the benefited

property from Dunn Brothers to Dunn caused the access license to terminate. “In

14.

construing a written instrument, the primary and paramount objective is to ascertain the

intent of the parties. The general rule is that contracts should be construed so as to give

effect to the intention of the parties.” Aultman Hosp. Assn. v. Community Mut. Ins. Co.,

46 Ohio St.3d 51, 53, 544 N.E.2d 920 (1989). We will examine the contract as a whole

and presume that the intent of the parties is reflected in the language of the contract. Id.

When the terms of a contract are unambiguous, courts will not, in effect, create a new

contract by finding an intent not expressed in the clear language employed by the parties.

Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635, 638, 597 N.E.2d 499 (1992), syllabus.

The initial determination of whether an ambiguity exists presents a question of law

subject to a de novo review. Aultman.

{¶ 28} Here, the access license remains in effect so long as the “Grantee” is “the

record owner” of the benefited property. The Agreement defines “Grantee” as “DUNN

BROTHERS, its employees, customers and invitees, an Ohio general partnership, the

purchaser of the Benefited Property.” The definition does not include any entity other

than Dunn Brothers, nor does it contemplate a change in ownership or legal status. The

parties agree that Dunn’s reorganization from partnership to limited liability company

amounted to a change in “legal status.” See, e.g., Germano v. Beaujean, 6th Dist. Wood

No. WD-12-032, 2013-Ohio-3846, ¶ 15, citing Dexxon Digital Storage, Inc. v. Haenszel,

161 Ohio App.3d 747, 2005-Ohio-3187, 832 N.E.2d 62, ¶ 64 (5th Dist.) (“An Ohio

limited liability company is neither a corporation nor a partnership, but hybrid containing

attributes of each. * * * Ownership of the L.L.C. rests not in partners or shareholders, but

15.

with members.”). Under the explicit terms of the Agreement, we find that Dunn cannot

be considered a “grantee.”

{¶ 29} Lending further support to our conclusion is the fact that the Agreement

specifies that the access license “shall be binding upon and inure to the benefit of Grantee

and Grantor, and Grantor’s successors and assigns.” It does not include the grantee’s

successors and assigns—with respect to the access license—whereas it does include the

grantor’s successors and assigns, and it includes both parties’ successors and assigns with

respect to the sign easement.

{¶ 30} In a similar case, a grantor sold a parcel of land to a school district but

reserved for itself the “Grantor’s right of first refusal” to buy back the land. The grantor

also reserved “by Grantor, for itself and its successors and assigns, the following

easements: [described therein].” Board of Education v. Homewood Corporation, 10th

Dist. Franklin No. 96APE02-246, 1996 WL 469278 (Aug. 13, 1996). Sometime after the

sale, the grantor assigned its right of first refusal to the plaintiff-appellant. When the

plaintiff-appellant attempted to exercise its right of first refusal, the school district filed a

declaratory action seeking a judgment that the appellant’s claimed interest in the property

was void and unenforceable. The lower court found in favor of the school district, and

the Tenth District Court of Appeals affirmed, finding that although “the law generally

favors the assignability of contract interests, including contract interests in real property,”

the right of first refusal in that case was “personal to [the grantor] and not assignable.

While the easements set forth under paragraph two were expressly extended to [the

16.

grantor’s] successors and assigns, this language is strikingly absent from the [provisions]

which established the right of first refusal.” Id. at *3. Accord Davis v. Anthony, 7th Dist.

Columbiana No. 97CO19, 1998 WL 896453 (Dec. 21, 1998), *3 (Right of first refusal

was personal and could not be assigned where the terms “heirs” and “assigns” were

“[c]onspicuously absent” from the provision creating the right of first refusal.). In this

case, we agree with appellant that the exclusion of the grantee’s successors and assigns

appears to have been deliberate and reflects the parties’ intention neither to bind, nor

benefit, any successor of Dunn Brothers.

{¶ 31} Dunn argues that the “change in ownership [from partnership to limited

liability company] was not such a change in record ownership so as to extinguish the

Access Right.” We find no support for Dunn’s position. Although the Agreement does

not define “record owner,” Black’s Law Dictionary (6th Ed.1990) defines that term as the

“person in whose name title appear on official records in contrast with one who claims

title through unrecorded documents.” (Emphasis added.) Dunn concedes that the record

ownership of the benefited property changed, from Dunn Brothers to Dunn, and that the

transfer was recorded by deed. (See Answer at ¶ 9, 14 and Affidavit of James Dunn at

¶ 5 and Dunn’s Sept. 11, 2015 discovery responses in which Dunn produced “the deed

* * * evidencing the transfer of the property from Dunn Brothers Partnership to Dunn

Bros. Ltd.”).

{¶ 32} We also reject the suggestion by Dunn that the change from partnership to

limited liability company transferred ownership of the benefited property, by operation of

17.

law. Throughout its brief, Dunn states that Dunn Brothers was “converted” to a limited

liability company “once limited liability companies were recognized by statute.” Ohio’s

“Limited Liability Company Act,” was enacted in 1994. See R.C. 1705.01 et seq. A

“conversion” is a type of merger, also created by the Act but not until October 12, 2006,

whereby an “entity,” including a partnership may be converted into a limited liability

company. R.C. 1705.361. (“[P]ursuant to a written declaration of conversion * * *, a

domestic or foreign entity other than a domestic limited liability company may be

converted into a domestic limited liability company.”). A conversion “avoids the

dissolution of one form of entity with the transfer of the assets to the owners and then a

second transfer of the distributed assets to a new entity.” Blackford, Baldwin’s Ohio

Practice, Business Organizations, Section 14:16:25 (2d Ed.).

{¶ 33} However, in order to convert an entity into a domestic limited liability

company and to enjoy the benefits of conversion by statute, R.C. 1705.361 requires a

specific written declaration of conversion setting forth enumerated terms. Further, R.C.

1705.381 requires that a certificate of conversion, signed by the authorized representative

of the converting entity, be filed with the secretary of state. The record in this case

before the court today contains no evidence that any of these statutory requirements have

been met.

{¶ 34} Finally, Dunn argues that the intent of the access license was to grant a

right of access across appellant’s property “so long as a car dealership owned by the

Dunns existed on Dustin Road.” The contract construction urged by Dunn conflicts with

18.

the express language of the Agreement, which is that the access license remain in effect

“so long as Grantee is the record owner of [the property].” As set forth above, we find no

ambiguity in these terms, and to find otherwise would amount to the making of a new

contract for the parties, which is not the function of this court. Indeed, “[i]t is not the

responsibility or function of this court to rewrite the parties’ contract to provide for such

circumstances. Where a contract is plain and unambiguous as herein, it does not become

ambiguous by reason of the fact that in its operation it may work a hardship upon one of

the parties.” Aultman at 54-55.

{¶ 35} Based upon the above, we find that, under the plain and unambiguous

language of the Agreement, the access license terminated upon the transfer of the

benefited property from the grantee, Dunn Brothers, to Dunn. The trial court erred by

denying appellant’s motion for summary judgment on this point. Appellant’s first

assignment of error is well-taken, in part. In light of our decision that the access license

was terminated, we find the balance of appellant’s argument, that the creation of Harbor

Drive rendered the access license obsolete, is moot, and therefore, we decline to address

it.

The Sign Easement

{¶ 36} In its second assignment of error, appellant alleges that the “new sign”

violates the sign easement in three respects: (1) it has two poles in violation of the

“single pole” requirement, (2) it “goes well beyond what is needed to identify the Dunn

Chevrolet business,” and (3) it exceeds the allowable maximum of 125 square feet per

19.

side. Appellant argues that it is entitled to judgment as a matter of law with respect to the

first issue and that material facts remain with respect to the second and third issues

requiring this court to remand the case for trial.

{¶ 37} An easement is a non-possessory interest in the land of another. Crane

Hollow, Inc. v. Marathon Ashland Pipe Line, 138 Ohio App.3d 57, 66, 740 N.E.2d 328

(4th Dist.2000). There are two kinds of easements: easements in gross and easements

appurtenant. “An easement appurtenant requires a dominant tenement to which the

benefit of the easement attaches or ‘appertains’ and a servient tenement upon which the

obligation or burden rests.” Lone Star Steakhouse & Saloon of Ohio, Inc. v. Ryska, 11th

Dist. Lake No. 2003-L-192, 2005-Ohio-3398, ¶ 24. “Easements appurtenant” run with

the land and thus transfer with the property as long as some record of the easement

appears in the chain of title of the dominant property. Pence v. Darst, 62 Ohio App.3d

32, 574 N.E.2d 548 (2d Dist.1989). An “easement in gross” generally does not have a

dominant estate and is purely servient, existing entirely independent of ownership of the

land. DeShon v. Parker, 49 Ohio App.2d 366, 361 N.E.2d 457 (9th Dist.1974). Ohio law

disfavors easements in gross, and, as such, easements are not considered in gross “when

it can be fairly construed to be appurtenant to some estate.” Ryska at ¶ 24.

{¶ 38} The easement at issue here is appurtenant: it runs “over, under and upon”

the servient land owned by appellant to provide “an irrevocable and perpetual license to

erect and maintain a single pole identification sign advertising [Dunn]’s business

operations on the Benefited Property,” i.e., the dominant estate.

20.

{¶ 39} The creation of an easement may be express, implied, or by prescription.

Trattar v. Rausch, 154 Ohio St. 286, 95 N.E.2d 685 (1950), paragraph two of the

syllabus. In order to create an express easement, the owner of the servient property must

grant or convey to the owner of the dominant property a right to use or benefit from its

estate. An express easement may be created by grant, reservation or exception in a deed.

See Yaeger v. Tuning, 79 Ohio St. 121, 124, 86 N.E. 657 (1908); Gateway Park, LLC v.

Ferrous Realty Ltd., 8th Dist. Cuyahoga No. 91082, 2008-Ohio-6161, ¶ 29. Here, the

parties agree that the sign easement is an express easement.

1. The statute of limitations bars appellant’s “single pole violation” claim.

{¶ 40} The parties argue over whether appellant may enforce the “single pole”

provision set forth in the sign easement. Dunn argues that the 15-year statute of

limitations set forth under the former version of R.C. 2305.06 (“Contract in Writing”)

bars appellant’s claim. Alternatively, Dunn argues that appellant waived its right to

enforce the provision by failing to raise the issue over the course of many years and

causing Dunn to believe that it did not object to the two poles which, in turn, induced it to

modernize the sign in 2012-2013, at a cost of over $87,000. Appellant counters that the

doctrines of waiver, estoppel, and laches do not apply to express easements, and even if

they did, there is a material question of fact as to whether those doctrines preclude it from

objecting to the “new sign.”

{¶ 41} To determine the appropriate statute of limitations with respect to a

declaratory judgment claim we look to the underlying nature or subject matter of the

21.

claim. Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 183, 465 N.E.2d 1298 (1984)

(“[I]n determining which limitation period will apply, courts must look to the actual

nature or subject matter of the case, rather than to the form in which the action is pleaded.

The grounds for bringing the action are the determinative factors, the form is

immaterial.”).

{¶ 42} Appellant seeks a declaratory judgment that the sign easement “has been

terminated” due to Dunn having violated the express terms of the easement by installing a

sign that is “inconsistent” with its terms, i.e., the terms pertaining to the single-pole,

purpose and size of the sign. We find that appellant’s claims arise under the sign

easement provision of the Agreement and are therefore subject to the statute of

limitations found in R.C. 2305.06, entitled “Contract in Writing.” Accord Rudolph v.

Viking Internatl. Resources Co., 4th Dist. Washington No. 15CA26, 2017-Ohio-7369,

¶ 4; Ohio Edison Co. v. Wilkes, 7th Dist. Mahoning No. 10MA174, 2012-Ohio-2718,

¶ 45-57 and Hoffman v. City of Akron, 9th Dist. Summit No. 12724, 1987 WL 9348

(Apr. 1, 1987) (Claim for breach of an express easement subject to R.C. 2305.06). But

see Byers v. DiPaola Castle, L.L.C. v. Portage Cty. Commrs., 11th Dist. Portage No.

2014-P-0047, 2015-Ohio-3089, ¶ 30 (Though styled as a “breach of contract” claim, the

cause of action involved the “scope of [an] easement” rather than the actual terms of the

contract to enter into an easement and was therefore governed by the ten-year statute of

limitations set forth in R.C. 2305.14).

22.

{¶ 43} R.C. 2305.06 provides that, “[e]xcept as provided in sections 126.301 and

1302.98 of the Revised Code, an action upon a specialty or an agreement, contract, or

promise in writing shall be brought within eight years after the cause of action accrued.”

The statute was amended from 15 years to 8 years on September 28, 2012. “For causes

of action that are governed by section 2305.06 of the Revised Code and accrued prior to

the effective date of this act, the period of limitations shall be eight years from the

effective date of this act or the expiration of the period of limitations in effect prior to the

effective date of this act, whichever occurs first.” (See Section 4 of the uncodified law

underlying the amendment to R.C. 2305.06). As set forth below, we find that appellant’s

claim with respect to the alleged single pole violation accrued in 1986, was subject to the

15-year statute of limitations, and expired in 2001.

{¶ 44} Generally, a cause of action accrues and the statute of limitations begins to

run at the time the wrongful act was committed. Collins v. Sotka, 81 Ohio St.3d 506,

507, 692 N.E.2d 581 (1998).

{¶ 45} Here, the alleged wrongful act occurred in 1986. Appellant does dispute

that the poles were installed in an “open, obvious and apparent” manner. While it does

not address the statute of limitations argument directly, appellant insists that its claim

accrued in 2012/2013 when Dunn installed the “completely new and entirely different

double pillar sign.”

{¶ 46} The evidence in the record does not support appellant’s argument.

Through the testimony of Fairchild, Dunn established that the original poles remain

23.

cemented in place, that they continue to serve as the supports for a sign, and that the

changes made to the poles in 2012/2013 were for cosmetic purposes only. 2 Indeed, it is

those cosmetic changes to the sign posts that appellant finds objectionable, despite

framing the issue as one involving a violation of the single pole provision. Appellant

states that the “original poles” are now “vastly different in appearance.” Thus, if the

original sign was supported by a single pole, and Dunn disguised it with the same

aluminum coverings, with the same “visual foot print” as the new sign, appellant’s

fundamental disagreement with the project would be no different, i.e., that a “narrow,

round, visually unobtrusive” pole had been obscured with a “wide flat” pillar. But,

appellant’s right to control the sign’s appearance is subject to the express terms of the

easement, i.e., the single pole, purpose, size, location, and compliance with city building

codes.

{¶ 47} Because the two poles remain fundamentally unchanged since their

installation, we conclude that appellant’s claim accrued in 1986. To the extent that the

original sign, with its two poles, violated the single pole provision, the 2012 redesign did

not trigger a “new period” within which to challenge the one-pole provision. Pursuant to

R.C. 2305.06, appellant had 15 years, until 2001, to file suit. Appellant did not file suit

until 2014, some 13 years past the deadline, and therefore, its claim with respect to the

The city’s permit for the 2012 project included the following “stipulation:”

[DUNN/INSTALLER] MUST USE SAME FOUNDATION AND POLE

STRUCTURE.”

24.

single pole violation is barred as a matter of law. Because this claim is time-barred, we

find no error in the trial court’s dismissal of that claim. Moreover, in light of our

decision, we find that Dunn’s laches defense is moot, and we decline to address it.

Accord Graham v. Allen Cty. Sheriff’s Office, 3d Dist. Allen No. 1-06-14, 2006-Ohio-

4183, ¶ 12.

2. The new sign otherwise complies with the sign easement.

{¶ 48} Appellant claims that issues of fact exist with respect to whether the new

sign complies with “the two other major limitations in the easement,” i.e., that it not

exceed 125 square feet on each side and that it be an “identification sign.”

{¶ 49} “When an easement is created expressly, the extent and limitations of the

easement depend upon the language of the creating instrument.” Merrill Lynch Mortgage

Lending, Inc. v. Wheeling & Lake Erie Railway Co., 9th Dist. Summit No. 24943, 2010-

Ohio-1827, ¶ 35 citing Columbia Gas Transm. Corp. v. Bennett, 71 Ohio App.3d 307,

318, 594 N.E.2d 1 (2d Dist. 1990).

{¶ 50} a. The size limitation. The sign easement restricts the size of each sign

face to “a maximum of one hundred twenty-five (125) square feet.” Dunn put forth

evidence to show that the upper, fixed sign and the lower sign board each measure 57

square feet, for a total of 114 square feet. According to Fairchild, that measurement is

well under the 127 foot limit set by Chapter 1337 of the Oregon, Ohio Code of

Ordinances, governing “Sign Regulations.” The record also includes a copy of the city

permit authorizing Dunn to install a “114 SF FREESTANDING SIGN ALTERATION”

25.

and a copy of a report indicating that the new sign passed inspection after its installation.

Even appellant agrees that “[t]he area of the sign with words itself is 114 square feet.”

We find that Dunn put forth sufficient evidence to show that the new sign complied with

the easement’s limitation.

{¶ 51} The burden of rebuttal then shifted to appellant to “set forth specific facts

showing that there is a genuine issue for trial” by “affidavit or as otherwise provided in

this rule.” Civ.R. 56(E). Appellant’s rebuttal evidence consists of an affidavit from its

former counsel who measured the square footage of the face of each “pillar,” added it to

the 114 square footage figure and arrived at a total square footage of 222 feet per sign

face. Appellant’s “position” is that the face of the pillars should be included in the

calculation of each sign face, despite conceding that the pillars/coverings bear no words

or markings of any sort. In support, appellant relies on Section 1337.02(c) of the Sign

Regulations, which provides that the area of a sign “may include supporting structures.”

(Emphasis added.) Of course, as evidenced by the permit and the inspection report, they

were not included for that purpose in this case. Absent any evidence to support its

contention that the “sign area” includes the supports, we find no genuine issue of material

fact left for trial and that Dunn is entitled to judgment as to appellant’s size violation

claim.

{¶ 52} b. The purpose of the sign easement. Finally, appellant challenges the use

of the sign board to advertise “deals on cars, free oil changes, and Honeybaked Hams”

and even the “necessity” of a “garish flashing multimedia board.”

26.

{¶ 53} The sign easement granted Dunn the right to install an “identification sign

advertising [Dunn’s] business on the Benefited Property * * * for the purpose of

identifying [Dunn’s] business operations on the Benefited Property.”

{¶ 54} Appellant claims that the easement does “not * * * allow ‘advertising’ in

[the] sense of soliciting customers with particular deals, but rather [is limited] to

identify[ing] Dunn’s business, i.e., to name it and to let people on Navarre Avenue know

the business is there.” (Emphasis in original.)

{¶ 55} We disagree. The easement plainly allows both: advertising and

identifying. The easement does not define the term “advertising,” but Merriam-

Webster’s Dictionary defines it as “the action of calling something to the attention of the

public especially by paid announcements.” The term “business” is defined as “a

commercial activity engaged in as a means of a livelihood.” See www.merriam-

webster.com.

{¶ 56} Dunn operates an automobile dealership. Using the sign board to call

attention to the commercial activities it provides on the Dustin Road property, i.e., car

sales, oil changes, and likely a host of other auto-related activities is allowed by the

easement. We reject appellant’s argument that the easement restricts the use of the sign

to anything other than identifying the location of the dealership.

{¶ 57} On the other hand, the record also indicates that Dunn used the sign board

to advertise on behalf of Honeybaked Hams during the 2013 holiday season. The parties

27.

agree that when appellant complained, Dunn removed the advertisement, and there is no

evidence of misuse of the sign since then.

{¶ 58} An easement holder may not impose additional burdens upon the servient

estate by engaging in additional usage of the easement. Centel Cable Television Co. of

Ohio, Inc. v. Cook, 58 Ohio St.3d 8, 567 N.E.2d 1010 (1991) (holding that allowing the

stringing of coaxial cable in the easement along with other utilities was not an additional

burden). If the dominant estate does increase the burden, the easement may be

terminated, but that remedy is not required. Walbridge v. Carroll, 184 Ohio App.3d 355,

2009-Ohio-5183, 920 N.E.2d 1046, ¶ 17 (6th Dist.) (holding that although the village

abused the easement by allowing trespassing vehicles access to the easement, termination

was not required and was not the appropriate remedy). Here, the trial court found that

“[the Honeybaked Ham] violation, standing on its own, [is] not a sufficient basis for

terminating the easement.” We agree. Dunn’s concession that the sign board is limited

to advertising its Dustin Road business is sufficient.

{¶ 59} Finally, appellant also claims that a dispute of fact exists over whether “a

garish flashing multimedia board is necessary to fulfill the easement’s purpose of

identifying Dunn’s business.” Again, the parties are bound by the terms of the sign

easement, and appellant’s ability to limit the design, structure and content of the sign are

set forth in the easement. Nowhere in the easement was appellant granted the authority to

determine whether a particular type of sign is “necessary” to achieve its purpose.

Moreover, “changes in the use of the easement are permitted to the extent they result

28.

from normal growth and development of the dominant land, and are a proper and

reasonable use of the easement.” Myers v. McCoy, 5th Dist. Delaware No.

2004CAE07059, 2005-Ohio-2171, ¶ 2. Dunn’s modernization of its signage to include

an electronic message board was permissible, subject to the express terms of the

easement.

{¶ 60} As set forth above, we find that appellant’s second assignment of error is

not well-taken and that Dunn is entitled to judgment as a matter of law with respect to the

appellant’s declaratory action to have the sign easement terminated.

Appellant’s trespass claim is barred as a matter of law.

{¶ 61} In its third assignment of error, appellant asserts that the trial court erred in

granting summary judgment to Dunn with respect to its common law trespass claim.

Appellant argues that, “[a]s demonstrated * * *, Dunn has exceeded the scope of the Sign

Easement and therefore is exceeding the scope of its authority to act on [appellant’s]

property (or at the very least, there are factual issues as to the scope of the easement).”

{¶ 62} A “common-law tort in trespass upon real property occurs when a person,

without authority or privilege, physically invades or unlawfully enters the private

premises of another whereby damages directly ensue * * *.” Apel v. Katz, 83 Ohio St.3d

11, 19, 697 N.E.2d 600 (1998). But, “a cause of action in trespass will not lie when the

purported trespasser holds an easement to the property on which he or she is purportedly

trespassing.” See, e.g., Bayes v. Toledo Edison Co., 6th Dist. Lucas Nos. L-03-1177,

29.

L-03-1194, 2004-Ohio-5752, ¶ 68. This is so, even when there is an issue of fact as to

whether the grantee exceeded the scope of the easement. Id. at ¶ 73-75 (Common law

trespass claim properly dismissed where plaintiff granted a license to utility company to

use his driveway and traverse across his property but summary judgment improperly

granted where trial court failed to “determine the scope of the easements and their

relevance to [plaintiff’s] claims for damages.”).

{¶ 63} In this case, because Dunn enjoyed an express easement to erect and

maintain a sign on appellant’s property, appellant cannot show that Dunn did not have

authority to enter its property. Consequently, the trial court properly dismissed

appellant’s trespass claim, irrespective of whether Dunn had exceeded the scope of its

authority, which as previously discussed, we see no evidence of. In all events, Dunn is

entitled to judgment as to appellant’s common law trespass claim against it, and

appellant’s third assignment of error is not well-taken.

Conclusion

{¶ 64} In review, appellant’s first assignment of error is found well-taken, in part,

and we therefore reverse, in part, the lower court’s October 1, 2018 decision and

judgment. As set forth herein, the access license is deemed to have been terminated upon

the transfer of the benefited property. Appellant’s second and third assignments of error

30.

are found not well-taken, and the balance of the trial court’s decision, granting judgment

in favor of Dunn, is affirmed. Pursuant to App.R. 24, the court orders that the parties

share the costs of this appeal in equal measure.

Judgment reversed, in part,

and affirmed, in part.

A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.