Peterson v. P.C. Towers, L.P., A92A1599

• Decision Date: 03 December 1992
• Docket Number: No. A92A1599,A92A1599
• Parties: PETERSON v. P.C. TOWERS, L.P.
• Court: Georgia Court of Appeals

Page 243

426 S.E.2d 243

206 Ga.App. 591

PETERSON v. P.C. TOWERS, L.P.

No. A92A1599.

Court of Appeals of Georgia.

Dec. 3, 1992.

Vincent, Chorey, Taylor & Feil, Otto F. Feil, III, Atlanta, for appellant.

Wiles & Wiles, John J. Wiles, A. Frank Settlemyer, Marietta, for appellee.

ANDREWS, Judge.

In 1987, Peterson rented 15,060 square feet of office space at Peachtree Center under a commercial lease agreement for a term of five years ending October 31, 1992. Alleging that Peterson defaulted by failing to pay rent due under the lease, P.C. Towers exercised its right under the lease to terminate the lease, and brought a dispossessory proceeding in March 1990, to have Peterson's business removed from the premises. In the dispossessory action, P.C. Towers also sought to collect approximately three months past due rent in the amount of $62,099.22, accelerated rent payable for the remaining term of the lease in the amount of $787,418.46, together with late charges, interest and attorney fees claimed due under the lease provisions. Peterson appeals from an order of the trial court granting summary judgment in favor of P.C. Towers.

When P.C. Towers filed the dispossessory action in March 1990, Peterson filed an answer interposing various defenses, but conceding that P.C. Towers was entitled to issuance of a writ of possession. The trial court issued a writ of possession, and Peterson's business was subsequently evicted in April 1990. The remaining issues in the dispossessory action dealing with amounts due under the lease were ordered set for trial. When the dispossessory action was filed, no claim was made for accelerated rent, but in March 1991, prior to entry of a pretrial order, P.C. Towers amended the action by adding a claim for the present value of accelerated rent.

1. Peterson contends the added claim was untimely, and the trial court erred by considering it. The amendment to the action was made prior to entry of a pre-trial order pursuant to OCGA § 9-11-15(a), and the trial court did not err in considering the added claim. Peterson v. American Intl., etc., Co., 203 Ga.App. 745, 746-747, 417 S.E.2d 402 (1992).

2. Peterson argues that P.C. Towers lost the right to collect post-eviction rent when it terminated the lease for nonpayment of rent by a letter dated February 1990, and subsequently evicted the business pursuant to the dispossessory action. Generally, when a landlord evicts a tenant and takes possession of the premises, the lease is terminated and the right to claim rent which accrues after eviction is extinguished. Bentley-Kessinger v. Jones, 186 Ga.App. 466, 467, 367 S.E.2d 317 (1988). However, the "parties to a lease agreement may contract in advance to hold the lessee liable for rent even after an eviction, deducting therefrom only the amounts recovered by the lessor from reletting the premises ... [if such an agreement is] premised on the existence of an explicit and detailed provision in the lease which clearly and unequivocally expressed the parties' intention to hold the lessee responsible for after-accrued rent even should an eviction take place." (Citation and punctuation omitted.) Id. at 467-468, 367 S.E.2d 317; Hardin v. Macon Mall, 169 Ga.App. 793, 315 S.E.2d 4 (1984).

The present lease provided that in the event the lease is terminated by the tenant's default, including non-payment of rent, "Landlord may, at its option, declare the entire amount of the rent which would become due and payable during the remainder of the term of this lease to be due and payable immediately upon ten days written notice to Tenant of Landlord's intent to accelerate said payments for the unexpired term; and with reduction to present cash value of said payments based upon a discount rate of twelve percent (12%) as the present value factor, in which event Tenant agrees to pay the same at once, together with all rents theretofore due, at the office of the Landlord, Atlanta, Georgia, provided, however, that such payments shall not constitute a penalty or forfeiture or liquidated damages, but shall merely constitute payment in advance of the rent for the remainder of the said term. Upon making such payment, Tenant shall receive from Landlord all rents received by Landlord from other tenants on account of said Premises during the term of this Lease, provided, however, that the monies to which the Tenant shall so become entitled shall in no event exceed the entire amount payable by Tenant to Landlord under the preceding sentence of this subparagraph." This language was a clear expression of the parties' intention that after eviction the tenant may, at the landlord's option, be held responsible for future accruing rent less amounts received from reletting of the premises. Notice of the landlord's intention to exercise this option was given, and termination of the lease and eviction of the tenant did not extinguish the landlord's right to collect after-accruing rent. Hardin, supra.

3. Peterson contends the acceleration clause quoted in Division 2 constituted an unenforceable penalty. The lease states the acceleration clause is not intended to be a penalty or liquidated damages, but rather an advance payment of rent by the tenant. It is clear that the sum representing accelerated rent is not an advance payment of rent by the tenant because the lease was terminated, and the landlord took possession of the premises. Acceleration of rent under these circumstances clearly constitutes an agreement to pay the landlord in possession of the premises a sum representing damages ensuing from a breach and termination of the lease. As such, it either qualifies as an enforceable liquidated damages provision, or it fails as a penalty. Jones v. Clark, 147 Ga.App. 657, 658-659, 249 S.E.2d 619 (1978); Glen Oak v. Henderson, 258 Ga. 455, 458-459, 369 S.E.2d 736 (1988) (acceleration clause in lease would be...