AnyConnect US, LLC v. Williamsburg Place, LLC

Decision Date05 November 2021
Docket NumberNO. 2021-CA-0044-MR,2021-CA-0044-MR
Citation636 S.W.3d 556
Parties ANYCONNECT US, LLC, Appellant v. WILLIAMSBURG PLACE, LLC; Scott Abell ; and Abell Rose, LLC, Appellees
CourtKentucky Court of Appeals

BRIEFS FOR APPELLANT: Ilam E. Smith, Louisville, Kentucky.

BRIEF FOR APPELLEE WILLIAMSBURG PLACE, LLC: T. Scott Abell, Louisville, Kentucky.

BEFORE: CLAYTON, CHIEF JUDGE; GOODWINE AND McNEILL, JUDGES.

OPINION

GOODWINE, JUDGE:

Appellant AnyConnect (US) LLC ("Tenant") appeals from an order entered by the Jefferson Circuit Court granting Appellee Williamsburg Place, LLC's ("Landlord") motion for summary judgment. After a careful review of the record, we affirm in part, reverse in part, and remand for additional proceedings consistent with this Opinion.

BACKGROUND

This action arises from a commercial lease1 between Landlord and Tenant in October 2016. Tenant agreed to rent approximately 4,700 square feet of office space in a building located at 9400 Williamsburg Plaza, Suite 220 in Jefferson County, Kentucky (the "Premises"). The Lease's term was three years, beginning on November 1, 2016 and ending on October 31, 2019. Rent was due in advance on the first day of each month. Rent for the term beginning November 1, 2016 through October 31, 2017 was $4,354 per month. Rent increased to $5,340 per month for the succeeding 24-month period beginning November 1, 2017 through October 31, 2019.

The Lease contains several provisions relating to notice and default pertinent to the issues on appeal. Specifically, paragraph 6 of the Lease provides: "Tenant has deposited $4,000 with the Landlord as security for Tenant's performance of this lease. Landlord will refund Tenant's deposit within seven days of the end of the lease term provided there has [sic] not been any uncorrected defaults by Tenant during the Lease." Paragraph 18 of the Lease requires Landlord to provide written notice of default to Tenant prior to starting any legal action to recover possession of the Premises:

18. Notice of Default. Before starting a legal action to recover possession of the Premises based on Tenant's default, Landlord will notify Tenant in writing of the default. Landlord will take legal action only if Tenant does not correct the default within ten days after written notice is given or mailed to Tenant.

Paragraph 19 of the Lease states: "19. Quiet Enjoyment. As long as Tenant is not in default under the terms of this lease, Tenant will have the right to occupy the Premises peacefully and without interference." Paragraph 23(d) further addresses defaults under the Lease:

(d) Tenant shall be in default of this lease, if Tenant fails to fulfill any lease obligation or term by which the Tenant is bound. Subject to any governing provisions or law to the contrary, if Tenant fails to cure any financial obligation within seven (7) days (or any other obligation within thirty (30) days) after written notice of such default is provided by Landlord to Tenant, Landlord may take possession of the Premises without further notice, and without prejudicing Landlord's right to damages. In the alternative, Landlord may elect to cure any default and the cost of such action shall be added to Tenant's financial obligation under this Lease. Tenant shall pay all costs, damages and expenses suffered by Landlord by reason of Tenant's defaults[.]

Last, paragraph 27 of the Lease states: "This lease will be governed by and construed in accordance with the laws of the Commonwealth of Kentucky."

Tenant paid rent due under the Lease for the first year. Tenant, however, ceased paying rent beginning November 1, 2017. This was the first month rent increased to $5,340.

In early December 2017, Tenant asked Landlord about floor plan dimensions and a price for any smaller space Landlord might have. Landlord does not appear to have directly responded to Tenant's inquiry.

Instead, on December 8, 2017, Landlord sent Tenant a notice of default letter,2 stating in relevant part:

This letter is to notify you that your $5,340 rent for the month's [sic] of November and December, 2017 have [sic] not been received. Rent is due on the first of each month, as indicated in Section 4 of the Lease dated Oct. 21, 2016. This is notice that your lease will be terminated and you must vacate the property by December 18, 2017, if we have not received your rent in full, by this date. The total amount owed under your lease through December 1, 2017, is $10,680.
Please remit immediate payment to, Williamsburg Place, LLC, 503 Croydon Ct., Louisville Ky., 40222-5551.

After receiving what it described as the "eviction notice," Tenant inquired again if other space was available. Landlord responded via email on December 12, 2017, stating: "Irrelevant until past due rent is paid in full."

On December 15, 2017, Tenant emailed Landlord, stating: "I have to inform you that AnyConnect will be vacating the space located at 9400 Williamsburg Plaza Ste 220, today and over the weekend. We will be out of the space by 12/18/17." Tenant vacated the premises by that date.

On March 29, 2018, Landlord, through counsel, wrote to Tenant regarding its default. It demanded payment of past due rent, which Tenant still had not paid, as well as rent for the remainder of the Lease, stating:

Please be advised that I represent Williamsburg Place, LLC. I am writing on my client's behalf to notify you that you are in default of the lease agreement because of your failure to pay your rental obligation for November of 2017 through October of 2019, per the terms and period of your lease agreement. You have also failed to communicate with my client concerning your lease or to respond to his attempts to reach you.
Please consider this letter as a demand for full payment of the past due amount and the amount due for breach of the lease agreement totaling $128,160.00. If you fail to pay as required my client will pursue any and all other rights and claims to which it is entitled under the law, including filing a lawsuit to collect the amount owed. A copy of the Complaint has been enclosed for your reference. If I do not hear from you or a representative from your company by April 6, 2018, I will proceed with litigation without further notice.

Landlord received no response to the letter and filed a lawsuit against Tenant in Jefferson Circuit Court on April 18, 2018.

In its complaint, Landlord asserted a claim for $128,160 for rent due under the Lease, pre-judgment interest at the legal rate, post-judgment interest, costs, and "[a]ttorney fees, if applicable." In addition to Tenant, Landlord named AnyConnect Corporation and Chris Piche as defendants.3 The defendants filed an answer and served written discovery, which Landlord answered on January 14, 2019. Defendants AnyConnect Corporation and Mr. Piche then filed a motion to be dismissed as parties, which the trial court granted on June 27, 2019.

Neither party took further action in the lawsuit until Landlord moved for summary judgment on June 9, 2020. Tenant opposed the motion and offered a judgment for $4,440.40 consisting of rent due for November 2017 and up to December 18, 2017, less the $4,000 security deposit. The trial court granted Landlord's motion for summary judgment.

In its December 14, 2020 order granting summary judgment to Landlord, the trial court determined there was no dispute Tenant failed to pay rent under the Lease beginning November 2017 to the end of the Lease's term in October 2019, which totaled $128,160. Regarding Landlord's December 8, 2017 letter, the trial court stated the letter "indicated its intent to assert its rights under the lease agreement, to include seeking rent for the duration of the agreement, repossession of the premises, attorney fees and costs." It rejected Tenant's argument that the letter terminated Landlord's entitlement to rent beyond the date of the notice and found "the parties’ lease agreement allows [Landlord] to take possession of the premises upon a breach of the agreement without prejudicing its right to damages." The trial court further found "that the language contained within [Landlord's] written notice to [Tenant] was intended to formally notify of [Tenant's] breach of the lease agreement in accordance with its terms and did not operate to impose a limit on damages to which it would otherwise be entitled." The trial court awarded Landlord damages in the amount of $128,160, plus pre-judgment interest at 6%, attorney's fees, and costs. This appeal followed.

STANDARD OF REVIEW

An appellate court's standard of review for a grant of summary judgment is "whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." Scifres v. Kraft , 916 S.W.2d 779, 781 (Ky. App. 1996). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 4 56.03. The record must be viewed in a light most favorable to the non-moving party, and all doubts are to be resolved in its favor. Steelvest, Inc. v. Scansteel Service Center, Inc. , 807 S.W.2d 476, 480 (Ky. 1991). "Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, an appellate court need not defer to the trial court's decision and will review the issue de novo. " Lewis v. B & R Corp. , 56 S.W.3d 432, 436 (Ky. App. 2001).

This appeal also involves the construction and interpretation of a commercial lease agreement. The construction and interpretation of contracts, including questions of ambiguity, are matters of law subject to de novo review. Frear v. P.T.A. Industries, Inc. , 103 S.W.3d 99, 105 (Ky. 2003). The primary objective in construing a contract is to effectuate the intentions of the parties. Cantrell Supply, Inc. v. Liberty Mutual...

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    ... ... instrument contrary to ... their plain and unambiguous meaning. AnyConnect US, LLC ... v. Williamsburg Place, LLC , 636 S.W.3d 556, 562 (Ky ... App. 2021) ... ...
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    ... ... retake possession of a leased location is enforceable ... See AnyConnect U.S. LLC v. Place, 636 S.W.3d 556, ... 562-63 (Ky. Ct. App. 2021). Because the undersigned is ... ...

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