Eleventh District Joins Other Ohio Appellate Courts in Holding that Common Law Duty to Mitigate can be Waived in Written Leases
Although the Ohio Supreme Court confirmed in the 2003 case of Frenchtown Square Partnership v. Lemstone, Inc., 99 Ohio St.3d 254, 2003 Ohio 3648, that the common law duty to mitigate is applicable to all leases, the 11th District recently joined the 10th (Franklin County) and 8th (Cuyahoga County) Districts in applying Ohio Supreme Court’s caveat in that case that this duty exists only “barring contrary contract provisions.”
In the case of Frenchtown Square Partnership v. Nick Ents., Inc., 2021-Ohio-663, the lease in question contained a provision that “Landlord has no duty to attempt to mitigate any damages from Tenant’s failure to observe any of the terms, covenants and conditions of this Lease . . . .” The 11th District relied on the Supreme Court’s language in Lemstone in holding that “the common law duty to mitigate damages in a commercial lease may be obviated by negotiation of the parties,” and then cited the language of the lease as a clear indication that the landlord and tenant had chosen to do so. The 11th District also refused to consider the tenant’s claim that the waiver of the duty to mitigate was unconscionable, because the unconscionability of a contract is an affirmative defense that must be raised by the defendant in its answer; since the tenant did not raise this issue until its motion for summary judgment, the 11th District held that the tenant had waived the defense.
If you have any questions about landlords’ and/or tenants’ duties under Ohio law or particular leases, please contact Andrew Hogan at Kohnen & Patton LLP.