Cumberland Center Associates v. Southeast Management & Leasing Corp.
| Decision Date | 19 September 1997 |
| Docket Number | Nos. A97A1665,s. A97A1665 |
| Parties | , 97 FCDR 3530 CUMBERLAND CENTER ASSOCIATES v. SOUTHEAST MANAGEMENT & LEASING CORPORATION. SPRINT COMMUNICATIONS CO. v. SOUTHEAST MANAGEMENT & LEASING CORPORATION. SOUTHEAST MANAGEMENT & LEASING CORPORATION v. CUMBERLAND CENTER ASSOCIATES. to A97A1667. |
| Court | Georgia Court of Appeals |
Paul, Hastings, Janofsky & Walker, John G. Parker, Joseph C. Sharp, Atlanta, for Cumberland Center Associates.
Smith, Gambrell & Russell, Edward H. Wasmuth, Jr., Atlanta, Mark W. McGrory, Charles J. Hyland, Kansas City, MO, for Sprint Communications Company.
Morris, Manning & Martin, Warren W. Wills, Jr., Ann R. Schildhammer, Atlanta, for Southeast Management & Leasing Corporation.
These three appeals arise out of a dispute over a real estate commission.
Cumberland Center Associates (hereinafter "Cumberland Center") owns an Atlanta office building that was largely vacant in 1985. At that time, Sprint Communications Company (hereinafter "Sprint") was looking for office space in Atlanta and hired Southeast Management & Leasing Corporation (hereinafter "Southeast") to help with the search. Sprint and Southeast agreed that if Sprint leased office space in Atlanta, Southeast would receive compensation from the landlord of the leased premises. Thereafter, Southeast contacted Cumberland Center and negotiated for Sprint to become the major tenant of Cumberland Center's office building. Sprint's tenancy was memorialized in 1985 by a lease agreement for a term of ten years (hereinafter "the 1985 lease").
Cumberland Center orally agreed to pay Southeast a market rate commission equal to two months' rent and a five percent annuity for the rent it received from Sprint. Shortly after the 1985 lease was signed, Southeast attempted to memorialize the commission agreement in writing and sent a proposed agreement to Cumberland Center. However, Cumberland Center refused to sign the written proposal because it disputed that Southeast was entitled to receive a five percent annual commission "in perpetuity" and objected to the "global" proposal submitted by Southeast. Even though no written agreement was signed, Cumberland Center paid Southeast the two months' rent and five percent commission from 1985 through 1990.
In 1989, Sprint was negotiating on its own with Cumberland Center regarding the possible lease of an additional office building owned by Cumberland Center. At the same time, Cumberland Center sent a letter to Southeast concerning the finalization of a written commission contract. Southeast and Cumberland Center executed a written commission agreement dated December 20, 1990 (hereinafter "Commission Agreement"). Southeast contends that Cumberland Center demanded it sign the Commission Agreement on threat that it would stop paying the five percent commission if Southeast refused. Southeast further contends that Cumberland Center added no consideration not already due under the alleged oral agreement and that the sole modifications to the alleged oral agreement were to reduce the amount of commission due Southeast after year 15 and to add certain restrictions to the collection of the commissions. Nevertheless, the written Commission Agreement was signed by both parties, and Cumberland Center paid Southeast commissions under the agreement from 1990 through 1994.
The written Commission Agreement (a) gave Southeast a five percent commission for rent Sprint paid on "the initial premises plus all expansions during said initial term" and "all renewals and extensions of the initial term" up to the year 2000; (b) reduced Southeast's commission to two and one-half percent after the year 2000; (c) ended Southeast's commission entirely after the year 2010; and (d) provided that no commission would be payable to Southeast "for such periods of time as Sprint employs someone other than [Southeast] as the exclusive agent for Sprint in connection with the leasing of space by Sprint within the Building and [Cumberland Center] is required to pay rental commissions to such other exclusive agents of Sprint in connection with space leased to Sprint within the Building." The Commission Agreement further stated that "[u]pon the termination of the Lease or any additional or substitute lease agreement between [Cumberland Center] and Sprint with respect to space within the Building ... then this Agreement shall terminate and [Cumberland Center] shall have no further obligations to [Southeast] hereunder for payments otherwise accruing after such termination."
In July 1993, with the 1985 lease set to expire in 1995, Sprint hired LaSalle Partners Management Limited Partnership (hereinafter "LaSalle") to begin looking for other possible rental locations in Atlanta. Cumberland Center began "open book" negotiations with LaSalle in an attempt to retain Sprint as a tenant. In a lease proposal sent to LaSalle, Cumberland Center stated as follows: LaSalle informed Cumberland Center that Sprint was not interested in a renewal of the 1985 lease. Instead, in an effort to reduce costs, Sprint wanted to enter a new lease with terms and conditions different than those in the 1985 lease. Specifically, Sprint refused to enter into a lease that gave Southeast any commission and informed Cumberland Center that it did not believe Southeast would be entitled to any commission if a new lease was entered.
Accordingly, Cumberland Center eliminated the cost associated with Southeast's commission in its proposals. However, Cumberland Center believed that Sprint had an obligation to pay its former broker, Southeast, commissions related to the lease it was negotiating with Sprint and recognized the potential for litigation with Southeast. Sprint did not believe it had any liability for Southeast's commissions, but agreed to share the risk related to a possible claim by Southeast. Sprint and Cumberland Center entered into a new lease agreement dated August 12, 1994 (hereinafter "the 1994 lease"). Shortly after Cumberland Center and Sprint entered into the 1994 lease, they also entered into a Risk Sharing and Indemnity Agreement by which they agreed to share the costs related to a possible claim by Southeast for commission.
Cumberland Center acknowledges that the 1994 lease involved the same building space, the same landlord and the same tenant. However, it contends that the terms of the 1994 lease are materially different from the 1985 lease. Since both Cumberland Center and Sprint treated the 1994 lease as a "new" lease rather than a "renewal" or "extended" lease, they terminated the 1985 lease. In January 1995, Cumberland Center informed Southeast it would no longer pay Southeast commission payments. Southeast filed a broker's lien on March 30, 1995 in the amount of $995,321.49, which purportedly represented commission payments due from January 1995 through August 2000.
On May 12, 1995, Cumberland Center filed a complaint seeking a declaratory judgment that Southeast was not entitled to further commissions and that its broker's lien was invalid, as well as asserting claims for slander of title, punitive damages and attorney fees. Southeast answered and counterclaimed for breach of the alleged oral commission agreement and breach of the 1990 written Commission Agreement, seeking damages under the theories of procuring cause, quantum meruit, unjust enrichment, conspiracy to deprive Southeast of a commission, and requesting perfection of its broker's lien and attorney fees. Southeast named Sprint and others as additional defendants in its counterclaim, specifically claiming Sprint wrongfully interfered with the Commission Agreement between Southeast and Cumberland Center and was a member of the conspiracy to defraud Southeast of its broker's commission.
Cumberland Center, Southeast and Sprint moved for summary judgment. In a single order, which does not provide findings of fact or conclusions of law, the trial court: (a) granted summary judgment to Cumberland Center on Southeast's counterclaims for breach of the alleged oral commission agreement unjust enrichment, and theories of procuring cause and quantum meruit; (b) granted summary judgment to Southeast on its counterclaim for breach of the 1990 written Commission Agreement; and (c) denied summary judgment to Sprint on Southeast's claims for tortious interference and conspiracy. We will deal with the claims in this order.
Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991).
In this case, Southeast contends the trial court erred in (a) denying it summary judgment and granting Cumberland Center partial summary judgment as to Southeast's claim for breach of the alleged oral agreement; (b) entering partial summary judgment in favor of Cumberland Center as to Southeast's claims for unjust enrichment and quantum meruit; and (c) entering partial summary judgment in favor of Cumberland Center as to Southeast's claim for commissions under the theory of procuring cause. For reasons which follow, we affirm the trial court's rulings in this case.
1. The trial court properly granted Cumberland Center's motion for partial summary judgment on the alleged oral agreement relating to Southeast's commissions. It is well-established that a contract does not...
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