Holcomb, Dunbar, Watts, Best, Masters & Golmon, P.A. v. 400 S. Lamar Oxford Mad Hatter Partners, LLC

• Decision Date: 17 March 2022
• Docket Number: 2019-CT-01702-SCT
• Citation: 335 So.3d 568
• Parties: HOLCOMB, DUNBAR, WATTS, BEST, MASTERS & GOLMON, P.A. f/k/a Holcomb Dunbar, P.A. v. 400 SOUTH LAMAR OXFORD MAD HATTER PARTNERS, LLC and Blake Tartt III
• Court: Mississippi Supreme Court

335 So.3d 568

HOLCOMB, DUNBAR, WATTS, BEST, MASTERS & GOLMON, P.A. f/k/a Holcomb Dunbar, P.A.

v.400 SOUTH LAMAR OXFORD MAD HATTER PARTNERS, LLC and Blake Tartt III

NO. 2019-CT-01702-SCT

Supreme Court of Mississippi.

March 17, 2022

ATTORNEYS FOR APPELLANT: MICHAEL N. WATTS, Oxford, BRADLEY TRUETT GOLMON

ATTORNEYS FOR APPELLEES: JOSEPH T. GETZ, LEWIS CLAYTON CULPEPPER, III

EN BANC.

ON WRIT OF CERTIORARI

ISHEE, JUSTICE, FOR THE COURT:

¶1. This is a landlord/tenant dispute regarding a commercial lease of an office space in Oxford, Mississippi. Holcomb, Dunbar, Watts, Best, Masters & Golmon, P.A. ("Holcomb Dunbar"), was the tenant and 400 South Lamar Mad Hatter Partners, LLC ("Mad Hatter"), was the successor landlord.

¶2. Mad Hatter sued Holcomb Dunbar for breach of the lease due to its failure to pay rent for the remaining eighteen months of its three-year lease. Mad Hatter filed a "Complaint in Ejectment, Breach of Contract and Associated Damages" in the Lafayette County Circuit Court. After discovery, Mad Hatter filed a motion for summary judgment, which the trial court granted. Mad Hatter was awarded $133,900 in unpaid rent. The trial court also denied Holcomb Dunbar's motion for partial summary judgment and motion to amend its counterclaim, while granting Mad Hatter's motion to quash certain subpoenas. Holcomb Dunbar's remaining counterclaims went to trial, and the jury found against it. Holcomb Dunbar appealed the trial court's rulings on these four motions. The Court of Appeals affirmed the trial court's judgment and this Court granted certiorari.

FACTS

¶3. Holcomb Dunbar entered into a nine-year commercial lease with Greenville Compress Co. in November 2009. The lease was segmented into three three-year options. Holcomb Dunbar renewed this lease in November 2012 for an additional three-year term to last through December 31, 2015. Greenville Compress Co. sold this property to Mad Hatter. Bradley Best of Holcomb Dunbar met with the principal of Mad Hatter, Blake Tartt, in September 2015 to discuss the next lease renewal. At this meeting, Best informed Tartt that Holcomb Dunbar was in the process of constructing a new building for its office in a nearby development called Oxford Commons. But Holcomb Dunbar was not certain the exact date it would be able to move into the new space. Tartt then offered Best a shorter-term lease on the property at a higher rate. However, the parties ultimately agreed to renew the final three-year option and Holcomb Dunbar was to move out as soon as the construction of the new building was finished. As a result, the lease was renewed in October 2015 with a December 2018 expiration term. During this meeting, Tartt told Best that he would help to find new tenants to take over. However, no provision in the lease required Mad Hatter to locate a subtenant for Holcomb Dunbar.

¶4. On August 3, 2016, Holcomb Dunbar corresponded with Tartt reminding him that it would be moving out in November 2016 and asked if it would need to find a replacement tenant, but Tartt did not respond. Holcomb Dunbar vacated the property in November 2016 and moved to Oxford Commons. In March 2017, Holcomb Dunbar gave Mad Hatter its key to the premises, and this fact was admitted by Mad Hatter in its answer. The last rental payment Holcomb Dunbar made under the lease was for April 2017. On April 11, 2017, Best secretly recorded a telephone conversation with Tartt about his progress in finding a replacement tenant for Holcomb Dunbar's remaining lease term. On June 29, 2017 and July 13, 2017, Mad Hatter sent notices of default to Holcomb Dunbar. On July 20, 2017, Best sent Tartt a notice of alleged breach of the lease that stated, "Holcomb Dunbar considers that its obligations under the lease of Suite A to be fulfilled and concluded" because Mad Hatter "breached its obligations under the lease and its duty to conduct itself in good faith and to deal fairly with the firm in numerous and repeated respects." Mad Hatter responded on July 21, 2017, by sending Holcomb Dunbar a "Three-day Notice" letter. This letter threatened a lawsuit for legal possession of the premises and past-due rent if the firm did not pay its past due rent of $19,500 and related fees in three days. Mad Hatter claimed that it never forfeited or terminated the lease.

¶5. In September 2017, Mad Hatter then filed an "Amended Complaint in Ejectment, Breach of Contract and Associated Damages," requesting possession of the premises and damages, a writ of possession, $32,000 in past due rent and fees and accelerated rent through the end of the lease term. Holcomb Dunbar then filed an answer and counterclaim.

¶6. A trial court hearing was then held on Mad Hatter's motion for summary judgment and motion to quash and on Holcomb Dunbar's motion for partial summary judgment and motion to amend. In its summary-judgment motion, Mad Hatter claimed twenty months of rent, from May 2017 to December 2018 at $6,500 a month, plus late fees. Mad Hatter prevailed on all four motions. The trial judge, without a jury trial, determined that Holcomb Dunbar was responsible for all twenty months of unpaid rent, plus late fees, for a total of $133,900. The trial judge granted the motion to quash and held that the matters were "irrelevant to the issues pending before the Court." The Court of Appeals then affirmed the trial court's grant of Mad Hatter's motion for summary judgment. Further, the Court of Appeals affirmed the trial court's grant of Mad Hatter's motion to quash certain subpoena documents and its denial of Holcomb Dunbar's motion to amend its counterclaim.

STANDARD OF REVIEW

¶7. A trial court's grant or denial of summary judgment is reviewed de novo . Hubbard v. Wansley , 954 So. 2d 951, 956 (Miss. 2007). Summary judgment is proper if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." M.R.C.P. 56(c). The evidence is viewed in the light most favorable to the nonmoving party. Id . "The moving party has the burden of demonstrating that [no] genuine issue of material fact exists, and the non-moving party must be given the benefit of the doubt concerning the existence of a material fact." One S. Inc. v. Hollowell , 963 So. 2d 1156, 1160 (Miss. 2007) (internal quotation marks omitted) (quoting Green v. Allendale Planting Co. , 954 So. 2d 1032, 1037 (Miss. 2007) ). "Partial summary judgment is also permissible under our rules, utilizing the same criteria for a grant or denial of a summary judgment and the same standard of review on appeal." Id . (citing Brown v. Credit Ctr. Inc. , 444 So. 2d 358, 363 (Miss. 1983) ; M.R.C.P. 56(d) ).

¶8. When reviewing a trial court's denial of a motion to amend a pleading, the standard of review is abuse of discretion. Spiers v. Oak Grove Credit , LLC , 328 So. 3d 645, 650 (Miss. 2021) (citing Taylor Mach. Works, Inc. v. Great Am. Surplus Lines Ins. Co. , 635 So. 2d 1357, 1362 (Miss. 1994) ). A de novo standard of review is used to analyze a ruling on a motion to quash. Syngenta Crop Protection, Inc. v. Monsanto Co. , 908 So. 2d 121, 124 (Miss. 2005).

1. Past Due Rent Award

¶9. Holcomb Dunbar asserts that the trial court should have granted its partial-summary-judgment motion because, under Mississippi law, if a landlord seeks possession and receives possession, it cannot also claim rent thereafter. Without giving Mad Hatter notice, Holcomb Dunbar vacated the premises in November 2016 and stopped paying rent after April 2017. Mad Hatter then sent notice of default letters in June and July 2017 that cite paragraph 21 of the lease which gave Mad Hatter the option to forfeit the lease. We agree with the trial court and the Court of Appeals that the default letters did not amount to termination of the lease. Paragraph 21 of the lease merely gives Mad Hatter the option to forfeit the lease. Paragraph 21 of the lease states:

(21) DEFAULT OF RENT, ETC.

All covenants and agreements herein made and obligations assumed are to be construed also as conditions and these presents are upon the express condition that if Lessee should fail to pay when due any one of the aforesaid installments of rent, or should fail to perform or observe any of the covenants, agreements or obligations herein made or assumed by Lessee, then and thenceforth, in any of said events, this Lease may be forfeited and thereby become null and void at the option of the Lessor , and said Lessor may immediately, or any time after the breach of any said covenants, re-enter said Premises and building, or any part thereof in the name of the whole, and repossess and have the same as of Lessor's former estate and remove therefrom all goods and chattels not thereto properly belonging and expel said Lessee and all other persons who may be in possession of said Premises and building. Prior to exercising the rights as described in this provision, the Lessor shall be required to provide a written notice of default to the Lessee and a 30-day opportunity to cure all alleged deficiencies.

(Emphasis added.)

¶10. Holcomb Dunbar argues that because Mad Hatter sought and received possession of the property, Holcomb Dunbar is not obligated to pay rent after surrendering possession of the property to Mad Hatter. According to Holcomb Dunbar, Mad Hatter could not claim rent beyond July 29, which was thirty days after Mad Hatter's demand for possession. Further, Holcomb Dunbar believes that Mad Hatter's July 21, 2017 letter in which Mad Hatter demanded legal possession of the premises; Mad Hatter's amended complaint "in Ejectment" and for writ of possession; and Holcomb Dunbar's answer all indicate that Mad Hatter requested and obtained possession of the premises.

¶11. Although the parties agree that paragraph 21's terms are unambiguous, each party has a different interpretation. Mad Hatter believes that its citation of ...