Ranwal Properties v. John H. Harland Co., A07A0835.

• Decision Date: 24 May 2007
• Docket Number: No. A07A0835.,A07A0835.
• Citation: 646 S.E.2d 730,285 Ga. App. 532
• Parties: RANWAL PROPERTIES, LLC v. JOHN H. HARLAND COMPANY.
• Court: Georgia Court of Appeals

285 Ga. App. 532

646 S.E.2d 730

RANWAL PROPERTIES, LLC v. JOHN H. HARLAND COMPANY.

No. A07A0835.

Court of Appeals of Georgia.

May 24, 2007.

Spell, Pless, Davis & Saurol, LeRoy P. Spell Jr., Atlanta, for appellant.

King & Spalding, Daniel J. King, Brian A. White, Atlanta, for appellee.

ANDREWS, Presiding Judge.

This appeal arises from John H. Harland Company's ten-year lease of a warehouse from the predecessor-in-interest of Ranwal Properties, LLC. Before Harland took occupancy, Ranwal's predecessor made improvements to the warehouse, including the construction of offices in it. Near the end of the lease term, Ranwal asked Harland to remove many of the interior improvements and also submitted invoices for insurance premiums it had paid over the life of the lease. Harland refused, and this suit followed. We affirm the trial court's grant of summary judgment to Harland on the question of improvements, reverse the denial of summary judgment to Ranwal on insurance premiums, and remand for further proceedings on attorney fees due under the lease.

"Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c)." Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997). A defendant moving for summary judgment may put forth evidence to show that there is no issue of fact as to one or more elements of the plaintiff's causes of action or demonstrate that the record lacks sufficient evidence to support one or more of the plaintiff's causes of action. Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). We review the grant or denial of summary judgment de novo, construing the evidence in favor of the nonmovant. Matjoulis, supra.

So viewed, the record shows that in August 1995, Harland and Ranwal's predecessor-in-interest, Rockdale Industries, Inc., agreed to lease a 60,000 square-foot industrial warehouse in Conyers to Harland for use in Harland's check-printing business for a period of ten years. Paragraph 9 of the parties' "Standard Industrial Lease Agreement" provided as follows:

[Harland] agrees to return the Premises to [Rockdale] at the expiration or prior termination of this Lease broom clean and in the same condition and repair as when first received, natural wear and tear . . . excepted. Upon [Rockdale]'s request, [Harland] agrees to remove any alterations installed by or for [Harland] after the commencement of the term of this Lease and any improvements which [Rockdale] determines are special purpose improvements which are not likely to be usable by a successor tenant.

The form lease also provided that Rockdale "will carry, at [Harland]'s expense, all risk insurance coverage on the Premises in an amount deemed appropriate by [Rockdale]," and that "[Harland] shall pay to [Rockdale], as additional rent, the amount of [Rockdale]'s premium within thirty (30) days of demand from [Rockdale]." A specially drafted additional provision, Paragraph 30, specified that Rockdale "shall make improvements to the Premises . . . in accordance with the terms of Exhibit D attached hereto," including a parking lot, 22,500 square feet of office space, a "wall between plant and offices," "lighting to Harland requirements," a sprinkler system, electrical service, dock doors, and a concrete slab, as well as plumbing and HVAC.

On November 17, 1995, Rockdale sold the property to Ranwal. On November 25, Harland took occupancy of the warehouse and Ranwal formally assumed Rockdale's obligations under the lease. On the same day, the parties signed an amendment providing that "[t]he Premises shall be used in [Harland]'s business of printing checks and for activities which are directly related and ancillary to such activity," and that the lease's ten-year term would expire on November 30, 2005.

Harland moved out in July 2004. An agent of Ranwal contacted the Harland employee left in charge of maintaining the property, and the two men conducted a walk-through in August 2004. In the year or so following the walk-through, Ranwal asked Harland to make a number of repairs, including the removal of all offices as well as some sprinklers and plumbing. Harland repaired some exterior features and removed interior lighting, humidifiers, and other items, but refused to remove what it considered "ordinary improvements" such as plumbing, HVAC equipment, and internal walls. Harland made all its monthly payments through the end of the lease. On July 20, 2005, Ranwal demanded $9,672 in insurance premiums necessitated by Harland's early vacation of the property; on October 6, it demanded an additional $83,523.52 for risk insurance premiums it had paid. When Harland also refused to pay these amounts, Ranwal sued for money due and attorney fees.

The trial court granted Harland summary judgment on Ranwal's improvement claim. It also granted Harland partial summary judgment on the insurance premium claim, reasoning that a question of fact remained as to the parties' intent to depart from the contract concerning the repayment of those premiums, but that Ranwal was time-barred from recovering premiums paid before October 1999. The trial court also ruled that neither party would receive fees.

1. Ranwal first argues that the trial court erred when it granted Harland summary judgment on the issue of improvements. We disagree.

It is undisputed that Rockdale made the improvements at issue before Harland took occupancy of the property, and that Harland was responsible for returning the property "in the same condition . . . as when first received." Moreover, Paragraph 16 of the lease specifies that "in no event shall [Harland] remove heating, ventilating, air conditioning, plumbing, electrical and lighting systems and fixtures or dock levelers" (emphasis supplied) — thus barring the removal of some of the very equipment Ranwal later demanded be removed.

Most important, Ranwal has failed to produce any specific facts in support of its claim that no other tenant could use the features installed for Harland at the outset of the lease. It is insufficient merely to state, as one Ranwal employee does, that he and a real estate agent "attempted to lease the Premises" and "spoke to various potential tenants" before concluding that the improvements were "unlikely to be usable by potential future tenants." See Southeast Reducing Co. v. Wasserman, 229 Ga.App. 1, 4(2), 493 S.E.2d 201 (1997) (affidavit unsupported by substantiating fact or circumstances is insufficient to raise a genuine issue of material fact). When the lease spoke of a "likelihood" of usefulness, it subjected Ranwal's judgment concerning that quality to a standard of reasonableness. See Sun Ins. Svcs. v. 260 Peachtree Street, Inc., 192...