Boilerplate Language Upheld in Ohio Storage Lease

By: Stephen D. Richman, Esq.-Senior Counsel-Kohrman, Jackson & Krantz

boil•er•plate (boi l r-pl t ) n.

1. A steel plate used in making the shells of steam boilers.
2. Inconsequential, formulaic, or stereotypical language: The new provisions of the lease renewal were merely boilerplate.

The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved. 

The first type of “boilerplate” defined above is pretty tough stuff. It can be up to twelve (12) inches thick and stop arrows, Greek fire and low caliber ammunition. Tough, one-sided contract and lease language is also referred to by many as “boilerplate”. What is amazing to me is how many tenants, landlords, brokers and dictionary writers believe such language is inconsequential or unenforceable, and how many do not worry about such language because they deem it “merely boilerplate.”

Notwithstanding the above definition, this author would like to caution you to worry, if you ever find yourself on the “wrong side of the boilerplate.” Contrary to “Mr. Heritage’s” beliefs, odds are that boilerplate (at least in a commercial lease/contract) will most likely be enforceable unless it is contrary to statutory law or public policy. Judges assume (rightly or wrongly) that commercial tenants and landlords are on equal footing with equal sophistication in business and lease matters. They believe commercial parties say what they mean and mean what they say in their contracts. Ohio court decisions regarding commercial leases are replete with language like the following: “when reviewing lease provisions, a court is to presume that the intent of the parties is in the language they used, and if the contract is clear and unambiguous, then we must follow the contract’s expressed terms and must not go beyond the plain language of the contract.” Langfan v. Carlton Gardens, 2009 Ohio App. LEXIS 2863. Accordingly, self-help provisions, landlord disclaimers of the duty to mitigate damages, warrants of attorney to confess judgement and disclaimers of warranties are just a few examples of boilerplate language upheld in commercial leases in Ohio.

The primary exception to the general enforceability of boilerplate language in Ohio is Ohio’s Landlord-Tenant Act (ORC Chapter 5301 et. seq.), which governs Ohio residential leases. Specifically, Section 5321.13 (d) of such Act provides that “No agreement by a tenant to the exculpation or limitation of any liability of the landlord arising under law or to indemnify the landlord for that liability or its related costs shall be recognized in any rental agreement or in any other agreement between a landlord and tenant.” Awards of attorney fees and warrants of attorney to confess judgment are also prohibited in residential leases. The Ohio Landlord-Tenant Act was enacted to protect residential tenants who are often in an unequal bargaining position from their landlords, and have a lot more to lose (e.g., their homes).

What about boilerplate language in storage unit leases? Often, such units are utilized to store beds, refrigerators and other furniture and appliances typically found in a residence. Do storage unit tenants have the same protection residential tenants have?

What if such boilerplate language in a storage unit lease goes so far as 1) disclaiming landlord liability (for patent and latent defects, failure  to repair and express and implied warranties); 2) imposing minimal, liquidated damages; and 3) requiring the tenant to indemnify landlord? That’s just inconsequential boilerplate, right Mr. Heritage? 

Not according to the Tenth District Court of Appeals in the recent case of Hopkins v. Car Go Self Storage,2019-Ohio-1793.

In Hopkins, the tenant-appellant entered into a lease agreement with appellee, “Car Go Self Storage” to store her personal belongings, including furniture, in appellee’s storage facility. Appellant testified in court that the facility was dry when the items were moved in, but when such items were retrieved, they were damp and covered with mold. Apparently there was a water leak that allowed water into the unit, causing the mold. Appellant sued appellee for breach of contract, negligence and conversion. The trial court held for appellee on all counts, and appellant appealed.

The court of appeals in Hopkins affirmed the decision of the trial court. The appellate court held that the negligence claim was properly dismissed because it was barred by the two-year statute of limitations. The conversion claim was properly dismissed because appellant admitted she was not prevented from recovering her property.

Regarding the contract claim, appellant claimed that her contract contained an implied warranty that the unit was fit and habitable for storage of property, and that such warranty was breached by the landlord. The 10^th District Court of Appeals apparently agreed with appellant that the elements establishing an implied warranty had been met. However, according to the court, such warranty was disclaimed by the landlord’s exculpatory clause that included a broad, but unambiguous release of liability for damage to property; and a clear, express waiver of implied warranties. Citing precedent (similar cases on point), the court in Hopkins simply applied the “general rule,” namely, that “exculpatory causes in lease agreements are generally valid absent a showing of ambiguity or unconscionability” and “if the court can determine intent from the plain [albeit exculpatory] language of the contract, then the court must apply that language as written and refrain from further contract interpretation.”

It is important to note that the Hopkins court did not preclude future challenges to a  storage lease, as unconscionable. Since appellant did not challenge her lease as unconscionability, however, the court in Hopkins simply concluded that “the court cannot address an argument that was not raised.”

So, what is the moral of this story? All language in a  lease is of consequence; boilerplate or not. The best weapon against boilerplate language is the delete key. Negotiate away boilerplate language before signing the lease. Afterwards, odds are you will be no more successful shooting holes through boilerplate language in court, as you would be shooting holes through the 12- inch- thick steel kind of boilerplate.

Ohio Appeals Court Uphold Landowners' Request for Detachment from the City of Dublin

On January 31, 2017, the 10^th Appellate District of the Ohio Court of Appeals (the Court) issued its decision regarding certain landowners’ petition to remove their land from the City of Dublin (the City).  The Court’s decision (cited as Rewyal Co. Ltd. Partnership Dublin, 2017-Ohio-367) concerns the application of Ohio’s detachment statute found at R.C. 709.41 and 709.42, which provides for detaching unplatted farm land from a municipal corporation.

The Court upheld the trial court’s decision to grant landowners' request for detachment from the City. However, although the landowners requested the land be attached to Washington Township, the trial court held that Perry Township was the most convenient adjacent township.

The landowners owned 3 parcels of real estate, a total of 41 acres of undeveloped land (the Property) that was annexed by the City from Perry Township in 1974. The Property was located in the northeast corner of the City and adjoined Columbus and Perry Township.

Ohio’s detachment statute contains 4 requirements:

1.       5 years shall have elapsed since the parcels were originally annexed by the city;

2.       The parcels must be farm land that was not within the original corporation limits of the city;

3.       The parcels are in or will remain within the city, and the landowners are taxed or will continue to be taxed for municipal purposes in substantial excess of the benefits conferred on them by reason of being in the city; and

4.       The parcels may be detached without materially affecting the best interests or good government of the city.

The burden of proof in detachment cases rest primarily on the landowners seeking detachment to show by competent and credible evidence that they satisfy the requirements of the statute.

R.C. 709.41 states that detachment cannot be sought within 5 years of the annexation. In this case, timing was not an issue, the annexation having occurred in 1974. The remaining 3 requirements are found in R.C. 709.42.

Is the Property ‘Farm Land’?

In this case, as in other detachment actions, the typical controversy with the 2nd requirement is whether or not the unplatted land is ‘farm land.’ Not surprisingly, the landowners and the City had very different opinions on the definition of farm land.  The statute doesn’t define what constitutes farm land, so the City argued for a restrictive approach that the land must be currently cultivated for raising crops or animals for food. The landowners pushed for a broader definition that would include land available for farming even if not currently used as such. The trial court opted for a definition similar to the landowners’ position, taking the common dictionary definition of “land used or suitable for farming.” The only statutory provision in Ohio’s Revised Code to define farm land (R.C. 931.01(c)) also takes a broader approach.

A few takeaways from the determination of whether the property qualifies are farm land:

·         The fact that two of the parcels were not taxed as CAUV property did not defeat a determination that they qualified as farm land.

·         The fact that two of the parcels were zoned residential did not defeat a determination that they qualified as farm land; particularly because these parcels had previously been used as farm land and were currently leased to another property owner for grazing horses and growing hay.

·         The expert opinion of a qualified appraiser that the Property was properly considered farm land was helpful to the landowners’ position.

Are the taxes paid on the Property in substantial excess of the benefits received?

The trial court conducted a comparative analysis of services provided by the City to the Property versus the tax burden and looked at the following:

·         The receipt of police protection was the sole benefit to the Property.

·         The services generally offered by the City were compared to those offered by Perry Township and found to be lacking – Most City services, such as trash collection, snow removal, leaf pick up and sewer, were not available to the Property. Perry Township could provide more services.

·         The City’s parks, recreation and community programs were a benefit but comparable amenities and programs could be accessed in the township as well.

·         Merely comparing the number of city employees devoted to services vis-à-vis the number employed by a township was not helpful so long as the township has sufficient staff to appropriately meet landowners’ needs based on its size and demands.

·         In conducting a cost of services analysis to taxes paid, the court considered only the services actually conferred on the landowners, not general intangibles. In this case, the minimal use of police protection by the landowners over the years was substantially less than what they paid in taxes.

Can the parcels be detached without materially affecting the best interest or good government of the City?

 The trial court placed the burden of proof for this last requirement on both the landowners and the City. It did not want to automatically elevate the City’s interest above those of the landowners.  In doing so, the trial court followed the approach of an earlier 5^th appellate court district decision that no preference would be given to the current trend in Ohio of favoring annexation of land into municipalities.

A few takeaways on this 4^th requirement:

·         The number of acres to be detached from a city compared to total city acreage and the relative loss of tax dollars caused by the detachment are factors in determining materiality.

·         The location of the parcels within the city limits can be relevant in determining whether or not detachment would change the identities of neighboring communities.

·         The City was concerned about creating a ‘township pocket’ and did not want to encourage zoning shopping, but its concerns did not carry the day with the Court.

 Despite the trend these days in favor of cities annexing township land, this case illustrates that it is possible to buck the trend and detach unplatted land from the city that annexed it. 
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