The renewal of leases for 24 properties that house Speedway stores was ineffective because the lessee’s failure to submit a timely renewal notice was the result of negligence, not an “honest mistake,” the Supreme Court of Ohio ruled today.

In a unanimous opinion, the Supreme Court reversed a Tenth District Court of Appeals’ decision invoking equitable principles to allow Ashland Global Holdings and Speedway to renew leases on the 24 properties even after the companies failed to meet the lease renewal provisions established in the contracts. In the proceedings below, the courts employed equitable principles to help Ashland, reasoning that the failure to send timely renewal notices to SuperAsh was an honest mistake, that the untimeliness did not harm the property owners, and that Speedway could lose $10 million worth of improvements to the property.

Writing for the Court, Justice Joseph T. Deters explained that Ohio law permits courts to invoke equitable principles to help parties in a contract when a dispute arises because of fraud, accident, or mistake. But when a party’s negligence is the cause of the disagreement, a court cannot interfere with the terms of a contract, even if the results are harsh.

“The trial court’s factual findings do not support the conclusion that Ashland failed to exercise its options to renew according to the terms of the leases because of an honest mistake,” he wrote.

Justice Deters added that a “simple email or phone call” by Ashland officials could have verified the submission of the renewal notices and prevented any confusion in the first place.

Chief Justice Sharon L. Kennedy and Justices Patrick F. Fischer, R. Patrick DeWine, Jennifer Brunner and Megan E. Shanahan joined the opinion. Eleventh District Court of Appeals Judge Matthew Lynch, sitting for Justice Daniel R. Hawkins, also joined the opinion.

Convenience Stores Enter Long-Term Leases
In 2010, Ashland Global Holding and its affiliates leased 24 convenience store properties from an investment group, SuperAsh Remainderman Limited Partnership. Speedway subleased the properties from Ashland.

The initial leases for each property were for five years. The leases contained renewal options that allowed Ashland to renew the leases multiple times. Ashland was required to send written notices of intent to renew 120 days before the expiration date. If Ashland did not renew the leases, improvements to the property would be retained by SuperAsh.

Ashland successfully renewed the properties the first time, meeting the deadline to send the written notice for its renewal, which extended the leases to 2020. The next year, Ashland missed the deadline to renew the leases, but SuperAsh accepted a delayed request to extend the lease to 2021.

Second Missed Deadline Led to Lease Termination
In 2021, Ashland again attempted to renew the leases for one year. According to the contract terms, Ashland was required to send SuperAsh a notice in September 2021.  Although Ashland’s attorney drafted a renewal notice and sent it to Ashland’s vice president to sign, the notice was never sent along to SuperAsh.

In November 2021, SuperAsh notified Ashland that its leases would expire at the end of December 2021 because Ashland had failed to renew them.  Ashland and SuperAsh attempted to negotiate new lease agreements. While the parties agreed to partial extensions of the leases that kept the existing agreements in place until April 2022, they could not agree on the renewal, and the leases expired.

Ashland Seeks Equitable Help to Avoid Property Losses
When negotiations failed, Ashland filed a complaint in Franklin County Common Pleas Court seeking a declaration that its renewal options should be honored by SuperAsh. SuperAsh filed a counterclaim, arguing that Ashland should be evicted from the premises because it had breached the leases.

The trial court determined that Ashland failed to submit the renewals on time due to an inadvertent, honest mistake. It noted that the strict enforcement of the deadline would result in a forfeiture of millions of dollars in property improvements. Thus, the court decided that the leases should not be terminated due to equitable principles.

SuperAsh appealed the decision to the Tenth District Court of Appeals. The Tenth District affirmed the trial court’s decision, citing precedent from a Sixth District Court of Appeals’ 1980 decision (Ward v. Washington).

SuperAsh appealed to the Supreme Court, arguing that instead of relying on Ward and other cases that followed, the Court should adopt the Second District Court of Appeals 2009 decision in Fifth Third Bank W. Ohio v. Carroll Bldg. Co.The Supreme Court agreed to resolve the conflict between the decisions and rule on SuperAsh’s appeal.

Supreme Court Analyzed Court Intervention
Justice Deters explained that, in general, strict compliance with time limits in contracts is not required. However, “time is of the essence” when the option in an agreement leaves an offer open for a set time. Strict compliance with the time limits was necessary for Ashland to renew the leases, unless some  justification excused the failure to meet the deadline, he wrote.

Ward and other cases that followed embraced the concept of an “honest mistake” as a justification for the use of equity.  An honest mistake, as described by Ward, includes a reasonably mistaken belief about a deadline or failure to meet a deadline despite reasonable attempts to do so.  If a party missed the deadline to renew a lease because of an honest mistake and a forfeiture would result, the contract could still be enforced as long as the delay did not harm the property owner.

However, the Court found that the Tenth District incorrectly defined honest mistake broadly to include negligence by Ashland. In contract terms, a mistake refers to a “misapprehension of something,” typically a misunderstanding about an important term in the contract. But this type of mistake occurs when the lease agreement is being crafted, the opinion explained. Ashland never indicated that it was confused about how to renew the leases or did not understand when and how it was supposed to demonstrate its intent to renew, the opinion noted.

Unlike a mistake, negligence is failing to exercise ordinary care, the Court noted. The opinion cited a long line of cases that indicate a court cannot use equity to excuse negligence, even if the result is a a hardship for one party.

“We recognize that denying equitable relief is a harsh result for Ashland and Speedway. Nevertheless, it is not the place of this court to set aside the negotiated terms of a contract because the consequences of that agreement will cause a hardship,” the Court concluded.

The Court remanded the case to the Tenth District for further proceedings.

2023-1448 and 2023-1588  Ashland Global Holdings Inc. v. SuperAsh Remainderman, Ltd. Partnership, Slip Opinion No. 2025-Ohio-2835.

View oral argument video of this case.

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