## Facts

- Commercial landlords leased retail premises to tenants under a five-year lease executed in October 1981.
- The lease allowed the tenant to remove “trade fixtures” at the end of the tenancy.
- During the lease term, the tenants installed wall-to-wall carpeting (secured with tack strips nailed into the floor) and track lighting for retail use.
- At lease termination, the tenants removed both the carpeting and the track lighting; carpet removal caused some physical damage to the underlying floor.
- The landlords claimed both items had become fixtures belonging to the realty and that removal was wrongful.
- Evidence indicated the carpet’s residual value was limited due to age and use, and the landlords did not prove economic loss from the removal.
- At the start of the lease, both parties understood the original floor would need repair or covering before the retail business could open, and the landlords were willing to pay for repairs.

## Issues

1. Whether wall-to-wall carpeting installed by a commercial tenant became a fixture (part of the realty) or remained removable under a lease clause permitting removal of trade fixtures.
2. Whether track lighting installed for retail operations was a fixture or a removable trade fixture at lease termination.

## Decision

- The court held that the track lighting was a trade fixture and could be removed by the tenants at the end of the lease.
- The court held that the wall-to-wall carpeting became a fixture and therefore was not removable by the tenants under the trade-fixtures clause.
- The court concluded that removal of the carpeting was improper, while removal of the track lighting was proper.

## Legal Principles

- Fixture status is determined under Ohio’s three-part test: (1) annexation to the realty, (2) appropriation or adaptation to the use of the realty, and (3) the objective intention of the party making the annexation.
- Intention is inferred from the nature of the item, the manner of installation, and whether the item serves the building generally or is specially adapted to the tenant’s business.
- An item that improves the premises generally and is installed as a floor covering integrated into the building is more likely to be treated as a fixture, even if removable with limited effort.
- An item uniquely suited to the tenant’s mode of business operation may qualify as a trade fixture removable at lease termination, consistent with a trade-fixtures clause.
- Physical damage from removal and post-removal market value may inform the analysis but do not control fixture classification absent proof tying removal to compensable economic loss.

## Conclusion

Applying Ohio’s fixture test, the court treated wall-to-wall carpeting as a nonremovable fixture because it functioned as a general improvement integrated into the premises, but treated track lighting as a removable trade fixture because it was specially associated with the tenant’s retail use.


Brown v. DuBois, 532 N.E.2d 223 (Marion Mun. Ct. 1988)