Eastgate Associates, Ltd. v. Piggly Wiggly Southern, Inc., A91A0683

• Decision Date: 16 July 1991
• Docket Number: No. A91A0683,A91A0683
• Citation: 410 S.E.2d 129,200 Ga.App. 872
• Parties: EASTGATE ASSOCIATES, LTD. v. PIGGLY WIGGLY SOUTHERN, INC.
• Court: Georgia Court of Appeals

Page 129

410 S.E.2d 129

200 Ga.App. 872

EASTGATE ASSOCIATES, LTD. v. PIGGLY WIGGLY SOUTHERN, INC.

No. A91A0683.

Court of Appeals of Georgia.

July 16, 1991.

Reconsideration Denied July 31, 1991.

Certiorari Denied Sept. 13, 1991.

Hurt, Richardson, Garner, Todd & Cadenhead, Harold N. Hill, Jr., James D. Comerford, Atlanta, Norman J. Radow, Marietta, for appellant.

Paul, Hastings, Janofsky & Walker, John G. Parker, Ronald T. Coleman, Jr., Atlanta, for appellee.

BIRDSONG, Presiding Judge.

We granted this interlocutory appeal to consider the trial court's treatment of our decision in Piggly Wiggly Southern v. Eastgate Assoc., 195 Ga.App. 10, 392 S.E.2d 337 ("Eastgate I"). The facts are set forth in that opinion and will not be restated here.

Eastgate contends the trial court erred by failing to apply the holdings in the first decision. Held:

1. In Eastgate I we held "the proper measure of damages to be applied is the excess of the rent reserved under the lease agreement over the reasonable rental value of the premises at the time of the breach." (Punctuation omitted; emphasis supplied.) Id. at 12, 392 S.E.2d 337. No motions for rehearing and no petitions for certiorari were filed.

Nevertheless, in subsequent proceedings in this case, the trial court found that using the reasonable rental value of the premises as it existed at the time of the breach in February, 1987, i.e., unimproved land, would not be appropriate: "Thus, it is fair to say that the two opinions [Szabo Assoc. v. Peachtree-Piedmont Assoc., 141 Ga.App. 654, 234 S.E.2d 119 and Eastgate I] erroneously hold that the reasonable rental value of the unimproved land at the time of the breach is a factor to be considered for appraisal purposes." (Emphasis supplied.) Therefore, the trial court modified its opinion and elected to measure the damages using the reasonable rental value of the premises as if the building had been completed as contemplated in the lease.

A trial court, however, regardless of its good intentions, cannot decide to disregard the opinions of this court. Art. VI, Sec. V, Par. III, Const. Ga., 1983; OCGA § 5-6-10; Atlanta Journal, etc., v. Long, 259 Ga. 23, 24, 376 S.E.2d 865; Callahan v. Panfel, 195 Ga.App. 891, 892, 395 S.E.2d 80. Further, absent a change in the evidentiary posture, the rulings of this court are binding on the trial court in all subsequent proceedings in this case and may not be disregarded. OCGA § 9-11-60(h); Jebco Ventures v. City of Smyrna, 259 Ga. 599, 601-602, 385 S.E.2d 397. "Whether [Eastgate I ] is right or wrong, it is binding on the parties." Braner v. Southern Trust Ins. Co., 255 Ga. 117, 122, 335 S.E.2d 547. " ' "Moreover, the decision of the appellate court, and any direction awarded, shall be respected and in good faith carried into full effect by the court below." ' " Palm Restaurant of Ga. v. Prakas, 192 Ga.App. 74, 76, 383 S.E.2d 584.

Additionally, we cannot adopt the "modified" measure of damages proposed by the trial court and the dissent because our prior ruling in this case is equally binding on this court even though we might now disagree with it. OCGA § 9-11-60(h); Gober v. Hosp. Auth. of Gwinnett, 191 Ga.App. 498, 499, 382 S.E.2d 106; Redmond v. Blau, 153 Ga.App. 395, 396, 265 S.E.2d 329. Therefore, we cannot adopt the dissent's revision of the measure of damages established in Eastgate I by redefining "premises" because doing so changes the measure of damages established in Eastgate I.

In Eastgate I, the initial consideration was the proper measure of damages, and this court adopted the time of the breach as the point at which to measure the damages. In so doing, two things were fixed: the time in which to measure the market for renting premises and the condition of the premises. Further, in addition to selecting the time of the breach as the point at which to measure the damages, this court also specifically rejected Piggly Wiggly's contention that the time of performance should be used in measuring the damages. Implicit in such a decision is the rejection of using the condition of the building as if it had been completed as contemplated in the lease because that would be the condition of the premises at the time of performance of the lease. Indeed, in accordance with paragraph 2(b) of the lease, the lease would not commence until after "the leased building is completed ... and ready for occupancy." Thus, giving Eastgate I the interpretation the trial court and the dissent now find appropriate completely changes the holding in Eastgate I.

While using the measure of damages specified in Eastgate I might have unintended benefits for Eastgate, the non-breaching party, using the measure of damages the trial court and the dissent now propose would give significant, unwarranted benefits to Piggly Wiggly, the breaching party. Because in most cases a comparable sale or lease is the most persuasive evidence of fair market value, it is hard to foresee circumstances in which the lease price stated in a lease for the identical property would not be considered the reasonable rental value of the premises. Therefore, using this measure of damages, the non-breaching party would recover no damages--which, of course, is the position taken by Piggly Wiggly's expert in this case. Additionally, the record contains evidence that Piggly Wiggly's breach caused the financing for the project to be withdrawn by the lender and Eastgate has been unable to find another anchor tenant with which to gain financing. Thus, having deprived Eastgate of its ability to complete the building, Piggly Wiggly would nevertheless receive the benefit of measuring the damages by assuming the building was completed. Further, the record also contains evidence showing that the market for supermarkets was more favorable at the time of the breach than at the time of performance because the market has become saturated. Therefore, the effect of this new measure of damages would be to unjustifiably inflate the reasonable rental value of the premises. Further, we must note the measure of damages established in Eastgate I was not proposed by Eastgate, but was urged by Piggly Wiggly, except that Piggly Wiggly asserted that the time of performance should have been used. Thus, this is not a case in which Eastgate has sought and won an unfair advantage, but one in which the other party, having successfully urged one theory, later becomes dissatisfied with the result.

We also have reservations about the measure of damages established in Eastgate I because we are concerned it does not accurately measure the damages in cases such as this. The cardinal rule in assessing the damages for a breach of contract is to attempt to place the non-breaching party, in so far as possible, in the same position it would have been if the contract had not been breached. OCGA § 13-6-1. Georgia Power, etc., Co. v. Fruit Growers, etc., Co., 55 Ga.App. 520, 190 S.E. 669. Neither the measure of damages established in Eastgate I nor those now proposed by the trial court and the dissent would accomplish that result. Instead, although Eastgate has suffered real damages, no damages may be awarded. Yet, if there had been no breach, Eastgate would have constructed the building, Piggly Wiggly would have paid its rent for the term of the lease, and Eastgate would have earned its profit on the lease, i.e., what it received from Piggly Wiggly less the amounts expended to construct the building and operation and maintenance expenses. Further, Eastgate would have constructed a shopping center and would have had an opportunity to earn rent from other tenants.

In our opinion, the proper measure of damages for a breach of an executory lease such as this should be the rental specified in the lease plus any special damages on behalf of the lessee incurred minus any amounts saved because of the breach, e.g. cost of construction of the building, operation and maintenance expenses, etc., reduced to present value. Further, it is not clear that even this measure of damages fairly compensates the non-breaching party when the breaching party was to be the anchor tenant in a shopping center because the anchor tenant's minimum rent may actually be below market value because of the recognized impact an anchor tenant would have in attracting other tenants to the shopping center, and because the loss of the anchor tenant causes the loss of minimum and percentage rent from other tenants as well as percentage rent from the anchor tenant.

Nevertheless, despite our reservations, as the evidence has not materially changed since Eastgate I, the holdings in that case are binding and we are not free to merely change the measure of damages because we believe we can establish a better measure of damages. OCGA § 9-11-60(h); Bruce v. Garges, 259 Ga. 268, 270, 379 S.E.2d 783. " 'While the holding in [Eastgate I] on its previous appearance before this court may be reviewed and overruled in another case, as between these parties, it must stand.' " Redmond v. Blau, supra.

Accordingly, the order of the trial court must be reversed and the trial court directed to render judgment on Eastgate's motion for partial summary judgment in accordance with the holdings in the Piggly Wiggly Southern v. Eastgate Assoc., supra.

2. Therefore, Piggly Wiggly's motion to supplement the record on appeal is denied.

Judgment reversed...