Gardner v. Jones, 54563
| Decision Date | 20 February 1985 |
| Docket Number | No. 54563,54563 |
| Citation | 464 So.2d 1144 |
| Parties | Jackie GARDNER and Gardner Land Company, Inc. v. Johnny N. JONES. |
| Court | Mississippi Supreme Court |
Roy D. Powell, Jackson, for appellants.
Neil P. Olack, James L. Jones, Watkins, Ludlam & Stennis, Jackson, for appellee.
Before WALKER, P.J., and HAWKINS and ROBERTSON, JJ.
I.
This action by a Lessee charges a Lessor with breach of a covenant of quiet enjoyment and several varieties of fraud. The problems arose because Jackson city zoning restrictions prevented Lessee from using the premises as he had intended. Lessee says Lessor should have told him of the zoning problems in advance.
As a result of the problems he encountered after entering the premises, Lessee was out of pocket some $5,450.35. By today's judgment we allow him recovery of that sum of and from Lessor. The evidence falls short of establishing gross or malicious conduct on the part of Lessor and, accordingly, we reverse the assessment of punitive damages and attorneys fees made against Lessor.
II.
The evidence adduced at trial reflects that Gardner Land Co., Inc., one of the Defendants below and one of the Appellants here, owns the property commonly known by street number as 106 Lockwood Circle in Jackson, Mississippi. This property includes three lots denominated Lots 3, 4 and 5, Block F, Alemeda First Addition, a subdivision within the First Judicial District of Hinds County, Mississippi. Lots 3 and 4 adjoin each other end on end and together they adjoin Lot 5. Lots 3 and 4 together are the same size as Lot 5. A building is situated on Lots 3 and 4, while Lot 5 is vacant.
Lots 3 and 4 have been classified C-2, limited commercial, pursuant to the 1974 City of Jackson Zoning Ordinance. Lot 5 is zoned R-1-A, single family residential, and is also subject to restrictive covenants permitting residential use only.
Before August of 1979, Johnny N. Jones, the Plaintiff/Lessee here, operated a mobile home sales, repair and service business in Jackson. His business activities included buying and selling used mobile homes, repairing mobile homes and selling a variety of mobile home related inventory. These activities often required that mobile homes be parked at his place of business.
In August of 1979, Jones telephoned Jackie Gardner, President of Gardner Land Company, Inc. 1 to express interest in leasing the property and moving his entire business to it. In that conversation, Jones informed Gardner that he needed office facilities, a storage area and a place to park mobile homes. Gardner responded that the property at 106 Lockwood Circle was suitable for Jones' purposes.
Later, Jones and Gardner went to view the property. Jones measured the lots to determine how many mobile homes could be parked there. Jones mentioned that the building needed repairs and that the lot would have to be cleared of debris before the property would be suitable for his business. In addition, Jones offered to make several improvements to the building in consideration for a reduction in monthly rent.
The subject of zoning or other land use restrictions was never discussed between the parties. Gardner made the representation that the property was "suitable" for Jones' purposes, but there is no evidence in the record reflecting any clear understanding on the part of anyone as to whether "suitability" referred to the physical dimensions and capabilities of the property, land use restrictions imposed by law, or just what. Gardner testified that he never thought about zoning in connection with the negotiation of the lease, although as will be explained below, there is good reason why he should have. In any event, Jones never asked nor does it appear that he made any independent inquiry regarding the zoning classification of the property.
On August 14, 1979, Jones entered into a lease contract with the Gardner corporation for the lease of the property in question. The lease term was three years. Significantly, nothing in the lease specifies the use of the property contemplated by the parties, nor does any provision in the lease limit or restrict use on the part of lessee Jones. Gardner does guarantee in Paragraph 9 of the lease that Jones shall have
the quiet, peaceful and uninterrupted possession of the leased premises during the entire term of this lease and any extension thereof.
In an addendum to the lease, Jones agreed to make numerous repairs and improvements to the property. In return, the lease payments were reduced from $500 per month to $350 per month for the first year.
As soon as the agreement was reached, Jones began clearing the lot and repairing and renovating the building. Office space was expanded, carpet was laid, windows were repaired, locks were installed, and electrical wiring modified. Mobile homes and other inventory were moved onto the property. There is no question but that all of this was done by Jones in good faith reliance on the assumption that he would be able to operate his business on the leased premises.
After Jones had incurred these expenses, a field inspector from the Jackson zoning department informed Jones that his use of the property violated the city zoning ordinance, that his business could only be operated from property with a light industrial zoning classification, and that he would have to move the mobile homes from the property immediately.
Thereafter, a meeting was arranged between Jones, Gardner and a number of city officials. At this meeting, the City again informed Jones and Gardner that Jones' use of the property was illegal and must cease. After the meeting, Jones vacated the property and notified the City that he was no longer in violation of City zoning laws.
There is some evidence that Gardner subsequently attempted to obtain a permit for a nonconforming use under which Jones might have been permitted to continue his business on the premises. Gardner contends that Jones vacated the premises without giving him the opportunity to obtain the permit. The fact is clear, however, that no such nonconforming use permit sufficient to allow Jones to continue was ever issued 2 and, in view of certain concessions made by Gardner as described below, nothing turns on the point.
The critical issue on this appeal is whether the Gardners' conduct was so egregious as to merit an assessment of punitive damages. This points turns on whether Gardner maliciously or intentionally set out to defraud Jones by enticing him to enter a lease of the premises for a use which Gardner knew was illegal and would always remain illegal. Gardner insists that at the time of negotiation of the lease the subject of zoning never entered his mind. The import of his testimony is that he had no malicious or fraudulent intent regarding the zoning and land use restrictions of the property because, not having thought about them at the time, he had no intent at all.
Jones emphatically testified at trial that Gardner never informed him that Lot 5 was zoned residential or that the zoning classification for Lots 3 and 4 prohibited outside storage. Furthermore, Gardner failed to advise Jones that there were restrictive covenants pertaining to Lot 5. Gardner admitted at trial that he never advised Jones of the zoning status of the property or the existence of restrictive covenants for Lot 5, but added that Jones never asked.
At trial, the evidence clearly established that Gardner was aware of the zoning restrictions before he leased the property to Jones. In fact, Gardner was confronted with zoning violations relating to the use of the property as early as 1967.
In 1967, Joe Ponthieux leased the property from Gardner for a bumper repair business. During his tenancy, Ponthieux stored bumpers inside and outside the building located on the property. From the very beginning, the Jackson zoning and planning departments received complaints regarding the zoning violations. Pursuant to the 1950 Zoning Ordinance, storage of bumpers on Lot 5 conflicted with its residential zoning. In addition, the commercial zoning classification of Lots 3 and 4 prohibited outside storage of inventory.
On May 5, 1967, Ponthieux and Gardner signed and filed a petition with the city zoning department in an effort to rezone Lot 5 from a residential to a commercial classification. However, the city council denied the zoning change. From that point until Ponthieux vacated the premises in 1979, his use of the property for a bumper repair business was a continuous zoning violation. Ponthieux testified that he was contacted by the zoning department on several occasions regarding the violations. He further testified that he discussed the zoning violations with Gardner on as many as ten occasions and that his last conversation with Gardner was possibly as late as 1979.
Ponthieux's testimony was corroborated by the testimony of James Garland, field inspector for the city zoning department, by Lloyd Montgomery, former zoning director, and by William David Hardin, zoning administrator pro temp.
Procedurally, Johnny N. Jones, Plaintiff below and Appellee here, commenced this action on June 24, 1981, by filing his declaration in the Circuit Court of the First Judicial District of Hinds County, Mississippi. Named as Defendants were Gardner Land Co., Inc., a corporation, and Jackie Gardner, individually. Jones alleged a lease agreement wherein he was lessee and Gardner Land Company, Inc., was lessor and then charged both Gardners with breach of the covenant of quiet enjoyment, fraudulent misrepresentation and fraudulent concealment. Jones demanded actual and punitive damages.
Trial was held in the Circuit Court, sitting in Jackson, Mississippi, on March 29, 1982, and resulted in a jury verdict for Plaintiff Jones on all issues. On April 6, 1982, final judgment was entered in favor of Jones and against Gardner Land Co., Inc., and Jackie Gardner individually, jointly and severally, (a) for actual damages...
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