In Kamms Plaza Shopping Ctr., LLC v Nida Enters., 2024 Ohio App. LEXIS 1940, the Ohio Court of Appeals held that the guarantor defendants were not bound by certain amendments to lease that were not signed by the guarantors.

In 1993, the landlord, Kamms Plaza Shopping Center, entered into a lease agreement with a tanning salon for space in landlord’s strip mall. The lease was signed by the defendants, Richard Staskevicius and Matti Lavikka, together with other parties, all in their capacity as the tenant, and it was also personally guaranteed by the two defendants pursuant to a separate guaranty. The court does not specify if the two defendants signed the lease (or later amendments) as individuals or in their capacity as signatories for a corporation. Over the course of the next 25 years, the lease was amended nine times. Lavikka signed the first two amendments and Staskevicius only signed the first amendment.

In 1999, the landlord and the tenant entered into a third amendment that changed many material terms of the 1993 lease, including relocating the tenant to a different space owned by the landlord. The defendants were not referenced in the third amendment nor did they sign the amendment or any of the amendments that followed in any capacity.  

At some point prior to 2018, the tenant breached the lease. In 2023, the landlord sued the defendants to recover under the personal guaranties claiming that the defendants were liable for the expanded obligations of tenant pursuant to the amended lease.

The court disagreed, pointing to the plain language of the guaranty, which provided in relevant part, that the guarantors “unconditionally guaranteed the payments of all rents in said lease on the part of Lessee to be paid and the prompt performance by lessee of all other terms and conditions of said Lease. The guaranty is limited to a maximum of [$33,150] for the lease dated November 8, 1993. * * * It is hereby agreed that no modification, extension, indulgence, forbearance or change granted to the lessee, its successors or assigns, shall release the undersigned from this guaranty.” (emphasis added)

The court interpreted the provisions of the lease and the guaranty to limit the guarantor’s obligations to only cover the terms of the original lease dated November 8, 1993, and subsequent modifications to the extent the modifications were also signed by the guarantors.  The court added that while the last sentence of the provision above provides that the guarantors would not be released due to any modification “granted to the lessee,” it does not provide that the guarantors would not be released due to a modification “to the lease.”  Consequently, the court found that the defendants could not be held liable for any amendments to the lease that the defendants did not sign in their capacities as tenant or guarantor.

This case is an important reminder to landlords to be careful when drafting amendments to include a signed acknowledgment from any guarantor that the terms of the guaranty extend to the terms of the amendment.