Asian Square Partners v. Cuong Quynh Ly

• Citation: 518 S.E.2d 166,238 Ga. App. 165
• Decision Date: 19 May 1999
• Docket Number: No. A99A0263.,A99A0263.
• Parties: ASIAN SQUARE PARTNERS, L.P. v. CUONG QUYNH LY.
• Court: United States Court of Appeals (Georgia)

518 S.E.2d 166

238 Ga. App. 165

ASIAN SQUARE PARTNERS, L.P. v. CUONG QUYNH LY.

No. A99A0263.

Court of Appeals of Georgia.

May 19, 1999.

Charles F. Peebles, Norcross, for appellant.

Paul S. Suda, Alpharetta, Max Benkel, Atlanta, for appellee.

POPE, Presiding Judge.

On or around May 14, 1993, Cuong Quynh Ly d/b/a K & T Billiards entered into a five-year written commercial lease with Asian Square Partners, L.P. The lease is a pre-printed form furnished by Asian Square, to which the parties made handwritten and typewritten changes. Paragraph 4(d) of the lease contains a five-year schedule of rent, which shows annual rental increases. Beneath the schedule is an asterisk referencing two footnotes at the bottom of the page. The first reads, "Tenant shall have a Five Year Option to lease." The second states, "Tenant shall start paying rent on July 15, 1993."

A rider to the lease granted K & T an option to renew for five additional years provided K & T gave Asian Square written notice 90 days prior to expiration of the original term. The renewal option stated, "The rental amount for each of the five (5) years shall be equal to a N/A percent N/A increase over the preceding year's rent." The term "N/A" in this provision was typed into two blanks on the pre-printed lease form.

K & T wrote a letter on March 21, 1998 notifying Asian Square that it intended to renew the lease for five additional years. On May 13, 1998, Asian Square replied that it would not renew the lease and that K & T had until June 15, 1998, to vacate the premises. When K & T did not vacate, Asian Square filed a dispossessory action. Following a brief hearing limited to the issue of the enforceability of the renewal option, the trial court found K & T had properly exercised its option to renew the lease and issued judgment in its favor. Asian Square appeals.

1. Asian Square first argues that the renewal option was unenforceable because it did not specify the rent to be paid during the renewal term.

"A provision for the renewal of a lease must specify the terms and conditions of the renewal with such definite terms and certainty that the court may determine what has been agreed on, and if it falls short of this requirement it is not enforceable. It must be certain and definite both as to the time the lease is to extend and the rent to be paid."

(Footnote omitted.) Smith v. Huckeba, 232 Ga.App. 374, 375(1), 501 S.E.2d 877 (1998). It is not necessary, however, that the renewal option specifically list these terms. It is sufficient if it provides a definite method for determining the amount of the rent and the duration of the renewal lease. The renewal provision is unenforceable only if these terms are not specified and no method is provided by which they can be determined. Patellis v. 100 Galleria Parkway Assoc., 214 Ga.App. 154(1), 447 S.E.2d 113 (1994).

In this instance, the renewal option specifically provides that the new lease shall be for five years, but states that the rent "shall be equal to a N/A percent N/A increase over the preceding year's rent." The parties disagree as to the meaning of this language. Asian Square argues the language shows that the parties did not decide what the rent would be during the renewal term. K & T argues the term "N/A" in the context of the language simply means that there will be no percentage increase in the rent during the renewal term.

There are three steps in the process of contract construction. The trial court must first decide whether the contract language is ambiguous; if it is ambiguous, the trial court must then apply the applicable rules of construction (OCGA § 13-2-2); if after doing so the trial court determines that an ambiguity still remains, the trier of fact must then resolve the ambiguity.

(Citations and punctuation omitted.) Empire Distrib. v. George L. Smith II &c. Auth., 235 Ga.App. 742, 744, 509 S.E.2d 650 (1998). A court should only consider parol or other extrinsic evidence if any ambiguity remains after it has applied the rules of construction. Id.

We agree with the trial court's determination that the language of the renewal option is ambiguous, and that the applicable rules of construction must be employed to determine the parties' meaning. We also agree with the trial court that no ambiguity remains in the language after the rules of construction are applied.

At issue is what the parties meant by the term "N/A." In construing a contract, courts must give words their usual and common meaning. OCGA § 13-2-2(2); McDuffie v. Argroves, 230 Ga.App. 723, 725(2), 497 S.E.2d 5 (1998). In general usage, the term "N/A" is a shorthand form of the phrase "not applicable." Thus, the renewal option may be read as providing that the rent for the renewal term "shall be equal to a not applicable percent not applicable increase over the preceding year's rent."

The law favors a construction of this language that will uphold the contract as a whole, and "the whole contract should be looked to in arriving at the construction of any part." OCGA § 13-2-2(4). Whenever the parties intended that a portion of the preprinted lease form was not to apply to their agreement, they drew a line through the language. However, they did not strike the language in the renewal option. Thus, it appears that the parties intended the renewal option to apply.

This conclusion is reinforced by a second rule of construction. Because the contract is printed, the typewritten portions of the contract prevail over the printed language. OCGA § 13-2-2(7); Grier v. Brogdon, 234 Ga.App. 79, 81(2), 505 S.E.2d 512 (1998). The lease contains a typewritten note in paragraph 4 stating that K & T was to have an option to renew, and the renewal option is intact, with the addition of the term "N/A" in the blanks specifying the percentage the rent would increase during the new lease.

When these rules are considered along with the rule that any ambiguity in the language must be construed against Asian Square as the drafter of the lease, OCGA § 13-2-2(5); McDuffie v. Argroves, 230 Ga. App. at 725(2), 497 S.E.2d 5; Promenade Assoc. v. Finish Line, 194 Ga.App. 741, 743, 391 S.E.2d 714 (1990), we find that the parties intended for the renewal option to apply, but did not intend for the language regarding a percentage increase in rent to apply. In other words, they intended that there would be no increase in rent for the renewal period.

And while the renewal option does not set out a specific...