Siarah Atlanta Hwy, LLC v. New Era Ventures, LLC

• Citation: 350 Ga.App. 59,828 S.E.2d 4
• Decision Date: 01 May 2019
• Docket Number: A19A0724, A19A0725
• Parties: SIARAH ATLANTA HWY, LLC v. NEW ERA VENTURES, LLC ; and vice versa.
• Court: United States Court of Appeals (Georgia)

350 Ga.App. 59

828 S.E.2d 4

SIARAH ATLANTA HWY, LLC

v.NEW ERA VENTURES, LLC ; and vice versa.

A19A0724, A19A0725

Court of Appeals of Georgia.

May 1, 2019

Justyn Dylan Alioto, Atlanta, Steven M. Mills, Boston, MA, Timothy S. Walls, Lawrenceville, for Siarah Atlanta Hwy, LLC.

Lauren Clipp Giles, Dana B. Miles, Jonah Blue Howell, Cumming, for New Era Ventures, LLC.

McFadden, Presiding Judge.

These appeals arise from a dispute over a commercial lease containing an option to purchase. The parties filed cross-motions for summary judgment, and the landlord filed a motion for release of funds paid into the registry of the court. The trial court ruled that New Era Ventures, LLC, the tenant, is entitled to specific performance of the option-to-purchase provision of the lease and that Siarah Atlanta Hwy, LLC, the landlord, is entitled to the funds paid into the registry of the court. The parties filed these appeals.

In Case No. A19A0724, Siarah argues that the trial court erred by finding that New Era properly exercised the option to purchase and by failing to find that Siarah had validly terminated the lease. We hold that New Era’s notice of its exercise of the option was effective and that Siarah did not terminate the lease. In Case No. A19A0725, New Era argues that the trial court erred by releasing to Siarah funds New Era had paid into the court registry for rent and other charges. We hold that the trial court did not err by awarding Siarah funds as rent, but we vacate the order in part and remand for the trial court to address whether the amount should be reduced by an award of breach-of-contract damages to New Era. We also vacate the part of the trial court’s order awarding attorney fees and remand because, in an apparent oversight, the court left blank the amount of attorney fees awarded to New Era.

1. Facts and procedural posture .

The facts are undisputed. Siarah owns a parcel of commercial property in Forsyth County. On May 1, 2015, Siarah and New Era entered a commercial lease contract under which New Era leased a portion of the property for an initial term of ten years. The contract granted Siarah the right to terminate the lease "for any reason whatsoever, by providing [New Era] with thirty (30) days written notice." In exchange for a payment of $ 175,000, the contract granted New Era the option to purchase the property. It provided:

31. Option to Purchase.

31.1. Purchase Option . PROVIDED TENANT IS NOT IN DEFAULT AND HAS LEASED THE PROPERTY CONTINUOUSLY FROM THE DATE HEREOF UNTIL SUCH DATE, LANDLORD GRANTS TO TENANT, AFTER NINE (9) MONTHS FROM THE COMMENCEMENT DATE HEREOF, AND EXPIRING Forty-eight (48) MONTHS FROM THE COMMENCEMENT DATE HEREOF, ONLY (the "Option Period"), THE OPTION TO PURCHASE FROM LANDLORD THE REAL ESTATE OF WHICH THE PREMISES IS PART AND WHICH IS MORE PARTICULARLY DESCRIBED ON EXHIBIT B . TENANT MAY EXERCISE THE OPTION BY PROVIDING WRITTEN NOTICE TO LANDLORD AT LEAST NINETY (90) DAYS PRIOR TO THE DATE OF CLOSING (the "Option Event").

(Emphasis in original.)

In accordance with the contract, New Era paid Siarah $ 175,000 for the option to purchase the property. On January 27, 2017, New Era sent Siarah notice that it would exercise the option. That same day, Siarah sent New Era notice that it was terminating the lease and demanding possession within 30 days.

In April 2017, Siarah filed a petition for a writ of possession against New Era in the Magistrate Court of Forsyth County. New Era filed a counterclaim, alleging breach of contract and seeking specific performance of the option-to-purchase provision of the lease contract. The magistrate court transferred the case to the Superior Court of Forsyth County. Then Siarah successfully moved to transfer the case to Gwinnett County because of a choice-of-venue provision in the lease. Siarah also amended its complaint to assert claims for breach of contract and slander of title.

The parties filed cross-motions for summary judgment, and Siarah moved for release of the funds New Era had paid into the registry of the court for rent and other charges. The trial court ruled that New Era was entitled to specific performance of the option-to-purchase provision and that Siarah was entitled to the funds paid into the court registry. These appeals followed.

"Summary judgment is appropriate when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. We apply a de novo standard of appellate review and view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant." Logistics Intl. v. Raco/Melaver , 257 Ga. App. 879, 880 (1), 572 S.E.2d 388 (2002) (citations and punctuation omitted).

Case No. A19A0724.

2. New Era exercised the option to purchase .

Siarah argues that because it terminated the lease, it terminated the option provision included in the lease, and New Era could not exercise the option. We disagree.

Siarah sent its lease termination letter on January 27, 2017. Thus termination would have been effective on February 26, 2017, after the 30-day, contractual notice period had ended. See Alexander v. Steining , 197 Ga. App. 328, 332 (II), 398 S.E.2d 390 (1990) (notice of termination became effective after statutorily mandated 60-day notice period had expired). Cf. Logistics Intl. , 257 Ga. App. at 880 (1) (a), 572 S.E.2d 388. But New Era exercised the option to purchase on January 27, 2017, before the attempted termination became effective, by notifying Siarah of its intent to purchase.

Siarah argues that in order to validly exercise the option, New Era had to actually purchase the property on or before January 31, 2017. We disagree. As noted above, on January 27, 2017, within the contractually defined option period, New Era sent written notice to Siarah that it was exercising the option, and it scheduled a closing for May 12, 2017, more than 90 days later. These actions complied with the requirements as set out in the lease contract and were effective to exercise the option. Contrary to Siarah’s argument, nothing in the contract requires the closing of the sale to occur within the option period.

To the extent that Siarah argues New Era was required to tender the purchase price to exercise the option, we disagree because

[a]n option to purchase can be exercised without the payment of the purchase price, or the tender thereof, unless the option contract provides for such payment as a condition precedent to the exercise of the option. On the sale of land, in the absence of express agreement, the payment of the purchase money and the delivery of the title deed are concurrent acts.

Pritchett v. Dodd , 112 Ga. App. 453, 454 (2), 145 S.E.2d 610 (1965) (citations and punctuation omitted). The parties’ contract does not provide for such payment.

Siarah argues that, even if New Era was not required to tender the purchase price in order to exercise the option, it was required to tender the purchase price in order to sue for specific performance. "Georgia law explicitly requires tender of the contract sales price to obtain specific performance." Peaches Land Trust v. Lumpkin County School Bd. , 286 Ga. App. 103, 106 (2), 648 S.E.2d 464 (2007). See Burns v. Reves , 217 Ga. App. 316, 317 (1), 457 S.E.2d 178 (1995) ("(B)efore equity will decree specific performance of a contract for the sale of land, there must be an absolute and unconditional tender of the purchase-price. An offer to pay the purchase-price on delivery of a properly executed deed is not an unconditional tender.") (citations and punctuation omitted).

However, "the law does not require actual tender as a condition precedent to entitlement to specific performance where rejection is deemed likely." Burns , 217 Ga. App. at 317 (1), 457 S.E.2d 178 (citation omitted). The undisputed facts show that Siarah’s rejection of the tender would have been likely. On February 17, 2017, counsel for Siarah wrote New Era that its notice of exercising the option was insufficient under the lease contract and that the option had expired on January 31, 2017. On February 20, 2017, counsel for New Era responded that its notice was sufficient and...