Radioshack Corp. v. Cascade Crossing II, No. S07Q0957.

• Court: Supreme Court of Georgia
• Writing for the Court: Carley
• Citation: 282 Ga. 841,653 S.E.2d 680
• Parties: RADIOSHACK CORPORATION v. CASCADE CROSSING II, LLC.
• Docket Number: No. S07Q0957.
• Decision Date: 29 October 2007

282 Ga. 841 653 S.E.2d 680 RADIOSHACK CORPORATION
v.
CASCADE CROSSING II, LLC. No. S07Q0957. Supreme Court of Georgia. October 29, 2007. Reconsideration Denied December 14, 2007.

[653 S.E.2d 681]

Bruce A. Taylor Jr., Burke A. Noble, Drew, Eckl & Farnham, LLP, Atlanta, for appellant.

David Leslie Pardue, Jill Rhodes Johnson, Hartman Simons Spielman & Wood, LLP, Atlanta, for appellee.

CARLEY, Justice.

Pursuant to a written commercial lease agreement executed in 1995, RadioShack Corporation leases space at a shopping mall owned by Cascade Crossing II, LLC. That agreement contains an exclusivity clause, which permits RadioShack either to reduce its rent payments or to terminate the agreement if Cascade leases space at the mall to another tenant for a business which is similar to RadioShack's. The lease agreement also authorizes the prevailing party in any legal action to recover all reasonable expenses including attorney's fees. In 2000, RadioShack informed Cascade that its 1996 lease with another tenant violated the exclusivity clause. RadioShack also purported to exercise its right to reduce its rent payments retroactively.

Cascade brought suit against RadioShack in the United States District Court for the Northern District of Georgia for declaratory judgment, back rent, and attorney's fees and costs. On appeal from the grant of partial summary judgment, the United States Court of Appeals for the Eleventh Circuit determined that RadioShack had waived all of its rights under the exclusivity clause and that Cascade, as the only prevailing party, was entitled to attorney's fees and costs. Cascade Crossings II v. RadioShack Corp., 131 Fed.Appx. 191 (11th Cir.2005). On remand, the parties agreed that the amount of back rent owed was 172,039, and the district

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court awarded Cascade the full amount of its attorney's fees and costs, which was approximately 280,000. On a second appeal, the Eleventh Circuit required the district court to explain the basis for its conclusion that OCGA § 13-1-11(a)(2) did not limit attorney's fees to 15% of the first 500 collected and 10% of the remaining amount. Cascade Crossing II v. RadioShack Corp., 171 Fed. Appx. 329 (11th Cir.2006). On the second remand, the district court explained that OCGA § 13-1-11 did not apply because Cascade sought not only past due rent, but also a declaration of rights under the lease agreement, as in Insurance Indus. Consultants v. Essex Investments, 249 Ga.App. 837, 844(4), 549 S.E.2d 788 (2001). On a third appeal, the Eleventh Circuit certified the following question to this Court:

Whether OCGA § 13-1-11 applies to and limits the award of attorneys' fees and costs in this particular case—where the landlord under a commercial lease agreement filed suit against a tenant seeking the collection of past due rent as well as a declaration of other contractual rights of the parties—and, therefore, precludes an award of full attorneys' fees and costs as provided in the lease agreement.

[282 Ga. 842] Cascade Crossing II v. RadioShack Corp., 480 F.3d 1228, 1232 (11th Cir.2007).

By its terms, OCGA § 13-1-11(a) applies to "[o]bligations to pay attorney's fees upon any note or other evidence of indebtedness" which is collected through an attorney after maturity. We must first address whether a lease comes within this language, because the dissent has raised that issue and urged us to depart from settled Georgia law. Since the issue was first addressed in 1977, the Court of Appeals has repeatedly held that a lease constitutes an "evidence of indebtedness" under OCGA § 13-1-11. Ranwal Properties v. John H. Harland Co., 285 Ga.App. 532, 536(3), 646 S.E.2d 730 (2007); Logistics Intl. v. RACO/Melaver, 257 Ga. App. 879, 881(2), 572 S.E.2d 388 (2002); Insurance Indus. Consultants v. Essex Investments, 249 Ga.App. 837, 844(4), 549 S.E.2d 788 (2001); Georgia Color Farms v. K.K.L., 234 Ga.App. 849, 852(3), 507 S.E.2d 817 (1998); Holmes v. Bogino, 219 Ga.App. 858, 859(2), 467 S.E.2d 197 (1996); Burgess v. Clermont Properties, 141 Ga.App. 112(2), 232 S.E.2d 627 (1977). "In other cases, OCGA § 13-1-11 has been applied unquestioningly to provisions in leases authorizing the landlord to recover attorney['s] fees against a tenant in default. [Cits.]" Holmes v. Bogino, supra. Furthermore, the Court of Appeals has always included "commercial" leases in its holdings, and clearly has recognized that, in applying OCGA § 13-1-11 to a lease, "[t]he rent and other charges which the lease required tenants to pay constituted the principal amount of their debt." Holmes v. Bogino, supra at 860(2), 467 S.E.2d 197.

This three-decade long line of consistent, uncontradicted precedent should not be swept aside based merely on a new analysis of the text and purpose of OCGA § 13-1-11 which differs from that enumerated in the many decisions cited above. We are not writing on a clean slate and, once the appellate courts interpret a statute,

"`"`the interpretation ... has become an integral part of the statute.' (Cits.) This having been done, (over a long period of history) any subsequent `reinterpretation' would be no different in effect from a judicial alteration of language that the General Assembly itself placed in the statute...." (Cit.)' (Cit.)" [Cit.]

Harvey v. J.H. Harvey Co., 276 Ga. 762, 763, 582 S.E.2d 88 (2003). Application of this principle of statutory construction is not limited to those common instances where the same appellate court has already construed the statute, or "`"`where an amendment is presented to the legislature and ... the statute is amended in other particulars.'" [Cit.]' [Cit.]" Abernathy v. City of Albany, 269 Ga. 88, 89, 495 S.E.2d 13 (1998) (recognizing that the statute is "particularly" applicable in the [282 Ga. 843] latter situation). It is a logical fallacy to make the most common circumstances in which the rule may be employed the exclusive determinant of its application. This Court does properly consider the legislature's presumed knowledge of a Court of Appeals' opinion interpreting a statute. Hart v. Owens-Illinois, 250 Ga. 397, 400, 297 S.E.2d 462 (1982). When the General Assembly acquiesces in the construction of a

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statute by the Court of Appeals, the effect is not to bind this Court with that court's precedents in violation of the Constitution. To the contrary, the result is to establish the legislative intent of the General Assembly which binds this Court, as well as all others, in construing the statutory provision in issue. "`The cardinal rule in construing a legislative act, is "`to ascertain the legislative intent and purpose in enacting the law, and then to give it that construction which will effectuate the legislative intent and purpose.'" (Cit.)' [Cit.]" Cox v. Fowler, 279 Ga. 501, 502, 614 S.E.2d 59 (2005). Thus, it is sufficient that, in the 30 years since the decision in Burgess, "[t]here has been no attempt on the part of the legislature to alter the construction of" OCGA § 13-1-11 therein. Georgia R. and Banking Co. v. Brown, 86 Ga. 320, 323, 12 S.E. 812 (1890).

Where a statute has, by a long series of decisions, received a judicial construction in which the General Assembly has acquiesced and thereby given its implicit legislative approval, the courts should not disturb that settled construction. [Cits.] "(E)ven those who regard `stare decisis' with something less than enthusiasm recognize that the principle has even greater weight where the precedent relates to interpretation of a statute." [Cit.] A reinterpretation of a statute after the General Assembly's implicit acceptance of the original interpretation would constitute a judicial usurpation of the legislative function.

Abernathy v. City of Albany, supra at 90, 495 S.E.2d 13. Accordingly, a "reinterpretation" of OCGA § 13-1-11, accomplished through the failure to adhere to the long line of cases applying that provision to leases, would constitute an unauthorized change in an "integral" part of the statute. See Abernathy v. City of Albany, supra. If OCGA § 13-1-11 is to be revised so as to exclude "commercial leases," "the General Assembly, rather than the courts, must take that action." Harvey v. J.H. Harvey Co., supra at 764, 582 S.E.2d 88.

Moreover, even if this Court could decide anew the proper construction of OCGA § 13-1-11, we would still arrive at the same conclusion as that which has long been expressed by the Court of Appeals. The phrase "evidence of indebtedness" cannot be considered a well defined term of art where, as here, there is an absence of [282 Ga. 844] express legislative guidance. Stillwell Enterprises v. Interstate Equipment Co., 300 N.C. 286, 266 S.E.2d 812, 816 (1980) (construing the same phrase). The phrase clearly has a broader meaning than the term "note," and contemplates application of the statute to a variety of documents other than notes. See Stillwell Enterprises v. Interstate Equipment Co., supra. Interpretation of the expression "evidence of indebtedness" so as to encompass both commercial paper and other documents is not foreclosed by unrelated instances in which that expression appears in connection with a statutory reference to commercial paper, and there are not any cases which draw a different conclusion. The only terminology in the statute which is ordinarily limited to commercial paper is "maker" and "endorser," and those terms are only used with the alternative "or party sought to be held on said obligation." OCGA § 13-1-11(a)(3). A lessee obviously can be an obligor to whom the statute applies. Furthermore, the Court of Appeals has already demonstrated that the terms "principal," "interest," and "maturity," which are also found in the statute, can be and are properly used with respect to monetary obligations in leases. Holmes v. Bogino, supra; Kasum Communications v. CPI North Druid Co., 135 Ga.App. 314, 217 S.E.2d 492 (1975).

A broad interpretation of the phrase "evidence of indebtedness"...