Buford-Clairmont, Inc. v. Jacobs Pharmacy Co., Inc.
| Decision Date | 22 April 1974 |
| Docket Number | No. 1,INC,No. 49157,BUFORD-CLAIRMON,49157,1 |
| Citation | 131 Ga.App. 643,206 S.E.2d 674 |
| Parties | v. JACOBS PHARMACY COMPANY, INC |
| Court | Georgia Court of Appeals |
Westmoreland, Hall, McGee & Warner, John L. Westmoreland, Jr., P. Joseph McGee, Atlanta, for appellant.
Kilpatrick, Cody, Rogers, McClatchey & Regenstein, George B. Haley, Jr., Thomas C. Harney, Atlanta, for appellee.
Syllabus Opinion by the Court
This case involves determination of the rights and liabilities of a landlord-plaintiff and tenant-defendant under a twenty-year lease for a combined drug store-cafeteria location in a shopping center upon tenant vacating the premises after an occupancy of only one year and five months.
The document which sought to spell out the obligations of the respective parties was a detailed commercial contract covering 40 pages in the record. In its final form it is composed of the original writing dated March 8, 1967, and four amendments. Initially tenant leased 9,100 square feet with the inducement proviso that landlord would have other tenants constituting '. . . a department store and a food supermarket and other retail and service stores as indicated . . . having a total lease area of not less than 85,000 square feet . . .' (R. 11). The four amendments changed the plan of the premises, increased both the size of the leased premises and the shopping center area and increased the rentals. The fourth and final amendment executed four years after the first agreement of March 8, 1967, established an acceptance of the premises by tenant with a 20-year term running from April 1, 1971, and specified the amount of rent payable by tenant from its original occupancy of November 19, 1970, to the inception date. The rental for the 20-year term was at an annual rate of $33,345 payable in monthly instalments of $2,778.75 or 2.5% of tenant's net sales at the leased location during a 12-month period, whichever is greater.
On July 6, 1972, while there still remained more than eighteen years of the agreed twenty-year term the tenant wrote landlord that it (R. 50).
Paragraph 14 of the lease contained two subparagraphs spelling out the remedies of the landlord in the event of a default by the tenant: Subparagraph (a) entitled 'Landlord to terminate the lease and take over the premises.' Subparagraph (b) provided that (R. 23, 24).
By letter from the landlord's attorney dated July 7, 1972, which apparently crossed the tenant's letter of the previous day, the tenant was notified that the vacating of the premises was a violation of paragraph 7(b). This paragraph provided that (R. 17). This letter also called upon tenant to comply with the terms of the lease agreement. (R. 51). Twenty days later (July 27, 1972) the attorney wrote tenant that landlord had placed a sign on the vacated premises which said 'Eckerds is coming' and which had been removed by tenant's employee. This letter further stated the landlord was 'exercising its rights under paragraph 14(b) of the lease agreement' (R. 52) and notified tenant to remove immediately its stock and fixtures. The record discloses that in the interim, on July 17, 1972, landlord had made a new lease for another drug store to occupy a portion of the premises.
Later in the year (November 14, 1972) landlord's attorney again wrote tenant. This letter reviewed the correspondence and advised tenant that a portion of the premises had been leased to Eckerd's Clairmont Mall, Inc. which lease required landlord to pay $40,000 and to give the new tenant a credit of $11,500 against future percentage rent. The new lease had been made July 17, 1972. Count 1 of the complaint seeks recovery of this sum of $40,000 paid towards conversion of the premises by the new tenant plus $5,000 attorney's fees.
As amended Count 2 of the complaint seeks recovery of $25,000 which landlord similarly advanced to another new tenant for conversion of the remainder of the original leased area into a restaurant and cocktail lounge.
Count 3 asks for damages of $50,185 from tenant as representing the difference in the amount of $75,558 expended by landlord for special plumbing, electrical, and other improvements to the premises in preparation for the defendant's special purposes and $25,373 representing the salvage value of said improvements after notification from the tenant of its intention to vacate the property.
Count 4 makes claim for an alleged deficiency in rent between that received from the two new tenants for the period from December 1972 through May 1973 and the amount of the rent that allegedly should have been paid by defendant under the lease agreement. Plaintiff computes this to be $4,059.54 but defendant's brief presents a computation which shows nothing to be due for this period with a small excess purportedly paid by defendant.
Defendant obtained summary judgment as to all four counts. Landlord-plaintiff thereupon took this appeal from that judgment. Appellee-tenant contends the trial court should be sustained upon two alternative theories: (Brief, p. 4).
1. We first deal with the latter contention because if this position is held to be correct then the trial court should be sustained. Appellee argues our task is to construe the lease which would be a matter of law for the court in conformity with Code § 20-701. But the appeal here does not involve construction of a contract. Instead we are required to make a decision upon the conduct and actions of the landlord following the tenant's letter of July 6, 1972.
Tenant points out that the result of the landlord's activities by converting the premises from one location into two stores resulted in the landlord receiving more rent than had been paid previously. We do not regard this exercise of sound business judgment by a landlord to be the determinative factor. Our decision must be based upon the contract which the parties made between themselves. They expressly agreed as to the legal remedies given the landlord upon tenant's default. There can be no question that tenant defaulted. The tenant's notification of July 6, 1972, that it was vacating the leased premises with no intention to return was a clear violation of Paragraph 7 forbidding an...
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