Level One Contact Inc v. Bjl Enter.S LLC
| Decision Date | 08 July 2010 |
| Docket Number | No. A10A1196.,A10A1196. |
| Citation | 305 Ga.App. 78,699 S.E.2d 89 |
| Parties | LEVEL ONE CONTACT, INC. et al.v.BJL ENTERPRISES, LLC. |
| Court | Georgia Court of Appeals |
Gibson, Deal, Fletcher & Dunham, John W. Gibson, Michael R. Dunham, Norcross, for appellants.
John W. Mrosek, Fayetteville, for appellee.
This contract case involves a commercial lease agreement. In April 2005, Samuel Winters, the owner of Level One Contact, Inc., contracted with Paul Green to rent a large manufacturing facility. Green spent over $180,000 toward specialized tenant improvements, and Winters, on behalf of Level One, signed a seven-year lease. The lease began in August 2005 with initial monthly payments of $5,250 and called for progressive payments until June 2012, with concluding monthly payments of $6,573. After seven months, Green sold the property to John Lunsford by virtue of a warranty deed that transferred all rights and privileges. Lunsford thereafter transferred title to the property to his family business, BJL Enterprises, LLC, by virtue of a similar warranty deed transferring all rights to the property.
Winters, on behalf of Level One, paid the rent each and every month. However, after operating the business for approximately two years, Winters sold substantially all business assets to North Star Chemicals, Inc. On September 4, 2007, Level One notified Lunsford that it was vacating the property and terminating the lease. Level One subsequently stopped paying rent.
In January 2008, BJL Enterprises filed suit against Level One and Winters for the unpaid rent due on the lease, fraudulent conveyances, stubborn litigiousness, bad faith, and punitive damages. Level One and Winters counterclaimed for failure to return their security deposit pursuant to the lease, conversion, trespass to property, attorney fees and punitive damages. A jury found in favor of BJL Enterprises and against Level One in the amount of $103,954 in past due rent, $67,734 in attorney fees and expenses of litigation pursuant to the lease, and $1 for attorney fees for stubborn litigiousness and bad faith. The jury found in favor of BJL Enterprises and against Winters for fraudulent conveyance in the amount of $103,954, and $1 for attorney fees for stubborn litigiousness and bad faith.
Level One and Winters appeal, alleging (1) the trial court erred in denying their motions for directed verdict because BJL Enterprises lacked standing to pursue its claims and because the lease was terminated; (2) the trial court erred in failing to let them challenge the attorney fees evidence proffered by BJL Enterprises; (3) the trial court erred in failing to reduce the amount of attorney fees awarded against Level One as required by statute; and (4) the trial court erred in awarding pre-trial discovery sanctions to BJL Enterprises based on a finding that Level One and Winters withheld documents during discovery. We reverse the trial court's judgment with respect to the attorney fees awarded pursuant to the lease because the amount is limited by statute. However, we affirm the trial court's order and judgment on all other issues.
1. Level One and Winters contend the trial court erred in denying their motion for directed verdict because BJL Enterprises lacked standing to pursue its claims and because the lease was terminated either by agreement of the parties or by operation of law. We find no merit to either of these claims.
Under Georgia law, a directed verdict is authorized only where there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom, demands a particular verdict.1 Consequently, the denial of these motions for directed verdict will be affirmed if, viewing the record in the light most favorable to the party opposing the motions, there is any evidence supporting the jury's verdict.2
(a) Standing: Level One and Winters argue that although BJL Enterprises has title to the property, it had no standing to enforce the commercial lease because there was never a written assignment of the lease from Green to Lunsford, or from Lunsford to BJL Enterprises. We disagree.
“The doctrine of privity of contract requires that only parties to a contract may bring suit to enforce it.” 3 An exception to this requirement of contractual privity occurs when a party assigns another the contractual right to collect payment, including the right to sue to enforce the right.4 However, to be enforceable by the assignee, such an assignment must be in writing.5
Here, there is evidence of a written assignment. The warranty deed transferring title to the property from the original landlord to Lunsford includes the following language: “To have and to Hold the said described property, with all and singular the rights, members [and] appurtenances thereof, to the same being, belonging, or in anywise appertaining, to the only proper use, benefit and behoof of the said Grantee forever in FEE SIMPLE.” 6 Likewise, the quitclaim deed transferring title to the property from Lunsford to BJL Enterprises also includes the language “with all the rights, members and appurtenances to the said described premises in anywise appertaining or belonging.” While the mere conveyance of title to the premises is insufficient to show an assignment of the lease, the language used in the deeds in this case can be read as an assignment of the lease at issue. Level One and Winters do not cite to any case, and we can locate no case, holding that such language in a deed does not constitute an assignment of a lease.
(b) Lease Termination: Winters and Level One rely on the case of Savannah Yacht Corp. v. Thunderbolt Marine,7 to support their contention that the lease was terminated because BJL Enterprises “forced” them to vacate the premises. However, we agree with the trial court's finding:
Contrary to Level One and Winters' contention, the record does not show that BJL Enterprises forced them to vacate the premises. In fact, Winters sent a letter to BJL Enterprises on September 4 2007, stating that Level One would be leaving the facility “by the end of October 2007.” And, on October 29, 2007, Level One sent another letter to BJL Enterprises indicating, “[t]he utilities have been scheduled to be disconnected on November 9, 2007.” Level One sent this letter “as a courtesy, as it intended to have vacated the Premises by that date.” Based on these facts, the jury was authorized to conclude that BJL Enterprises did not force Level One and Winters to vacate the premises when Lunsford hired a locksmith on November 9, 2007 to change the locks on the premises.
Viewing the record in the light most favorable to BJL Enterprises, as the party opposing the motions for directed verdict, we find sufficient evidence supporting the jury's verdict that the lease was not terminated and that Level One and Winters owed BJL Enterprises for past due rent. The trial court did not err in denying Level One and Winters' motions for directed verdict.
2. Level One and Winters contend the trial court erred in failing to let them challenge the attorney fees evidence proffered by BJL Enterprises. We find no error.
The record shows that during Level One and Winters' cross-examination regarding BJL Enterprises' attorney fees, the trial court twice warned their attorney not to go into the substance of pre-trial motions or trial court rulings. Despite these admonishments, counsel continued to ask questions related to the disposition of certain motions. The trial court dismissed the jury, and the following colloquy occurred:
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