Fab'rik Boutique, Inc. v. Shops Around Lenox, Inc.
Decision Date | 08 September 2014 |
Docket Number | No. A14A0937.,A14A0937. |
Court | Georgia Court of Appeals |
Parties | FAB'RIK BOUTIQUE, INC. v. SHOPS AROUND LENOX, INC. |
Littler Mendelson, Jerry Chester Newsome, Atlanta, for Appellant.
Arnall Golden Gregory, James A. Gober, Atlanta, Rebecca Ireane Lunceford, for Appellee.
Fab'rik Boutique, Inc. (“Fab'rik”) sought a declaratory judgment that a restrictive covenant in its lease with its landlord, Shops Around Lenox, Inc. (“Shops”), is unenforceable because it is overly broad. Both parties moved for summary judgment, and the trial court denied Fab'rik's motion and granted summary judgment to Shops. We find the restrictive covenant ambiguous, but that ambiguity can be resolved by application of the general rules of contract construction. So construed, the restrictive covenant is not overly broad. Accordingly, we affirm.
Atlantic Ins. Brokers v. Slade Hancock Agency, 287 Ga.App. 677, 652 S.E.2d 577 (2007) (citation omitted). “[C]ontract disputes are particularly well suited for adjudication by summary judgment because construction of contracts is ordinarily a matter of law for the court.” Waste Mgmt. of Metro Atlanta v. Appalachian Waste Systems, 286 Ga.App. 476, 649 S.E.2d 578 (2007) (citation omitted).
The lease also contained an option permitting Fab'rik to extend it for three more years, “[p]rovided no [e]vent of [d]efault exists.”
In May 2012, Fab'rik informed Shops that it wanted to extend the lease. Shops responded that Fab'rik had defaulted under the lease by opening two other “Fab'rik” stores within five miles of the leased premises, and Shops declined to extend the lease unless Fab'rik cured the default. Instead, Fab'rik filed its complaint asking the trial court to enter a declaratory judgment that it was not in default under the lease and consequently it was entitled to extend the lease. Fab'rik alleged, among other things, that the radius restriction was invalid because it was overly broad.
Both parties moved for summary judgment, and the trial court granted summary judgment to Shops. The trial court construed the radius restriction to apply to the opening or operation of other stores selling women's clothing and accessories under the “Fab'rik” trade name and ruled that this restriction was reasonable.
Fab'rik argues that the trial court improperly construed the radius restriction and that, properly construed, that provision unreasonably prohibited it from opening or operating a store of any type, not merely a women's clothing and accessories boutique bearing the “Fab'rik” trade name. We find no error with the trial court's construction of the radius restriction.
City of Baldwin v. Woodard & Curran, Inc., 293 Ga. 19, 30(3), 743 S.E.2d 381 (2013) (citation omitted); see also Azzouz, 296 Ga.App. at 604(1)(a), 675 S.E.2d 314.
The radius restriction at issue in this appeal pertinently provides that Fab'rik “agrees not to open or operate another store ... within five miles of the [leased p]remises[.]” (Emphasis supplied.) Fab'rik argues that this provision unambiguously prohibits it from opening a store of any type, focusing on the generality of the word “store.” But the plain language of the radius restriction does not prohibit “any store” or “stores of any kind”; it prohibits Fab'rik from opening or operating “another store.” (Emphasis supplied.) This language, on its face, does not unambiguously provide for the expansive restriction asserted by Fab'rik. See Citrus Tower Blvd. Imaging Ctr. v. David S. Owens, MD, PC, 325 Ga.App. 1, 8(2), 752 S.E.2d 74 (2013) ( )(citation and punctuation omitted). Instead, the phrase “another store” is also open to the interpretation proposed by Shops—that it refers to another store of the specific type addressed in the lease (namely, a “[w]omen's clothing and accessories boutique similar to other Fab'rik boutiques” operating under the “Fab'rik” trade name). See id. ( )(citation and punctuation omitted).
Application of the statutory rules of contract construction resolve this ambiguity in favor of Shops. Under OCGA § 13–2–2(2), “[w]ords generally bear their usual and common signification[.]” And under OCGA § 13–2–2(4), “[t]he construction which will uphold a contract in whole and in every part is to be preferred, and the whole contract should be looked to in arriving at the construction of any part.” The lease as a whole addressed a specific type of store. And in another provision, concerning rent, the lease refers to “other ‘Fab'rik’ stores” (emphasis supplied), thereby limiting the meaning of the word “store.” Construing the term “another store” to mean other stores of the specific type addressed in other lease provisions is consistent with the usual and common meaning of the word “another” and with the manner in which the concept of a “store” was treated elsewhere in the lease. Moreover, the more expansive construction of the term urged by Fab'rik, which Fab'rik alleges would result in the invalidation of the lease's radius restriction, see generally Watson v. Waffle House, 253 Ga. 671, 673(2), 324 S.E.2d 175 (1985) (...
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