W. Asset Mgmt., Inc. v. NW Parkway, LLC

Decision Date30 March 2016
Docket NumberNos. A15A1830,A15A1831.,s. A15A1830
Citation336 Ga.App. 775,784 S.E.2d 147
Parties WEST ASSET MANAGEMENT, INC. v. NW PARKWAY, LLC ; and vice versa.
CourtGeorgia Court of Appeals

Bondurant, Mixson & Elmore, M. Jerome Elmore, Timothy Scot Rigsbee, Atlanta, Caplan Cobb, Michael Adam Caplan, for Appellant.

Barnes Law Group, Roy E. Barnes, John Frank Salter Jr., for Appellee.

ELLINGTON, Presiding Judge.

NW Parkway, LLC, brought this action in the Superior Court of Cobb County against West Asset Management, Inc. ("West") for claims arising from a commercial property lease agreement. West filed counterclaims arising out of the same lease. Both parties moved for summary judgment, which the trial court granted in part and denied in part. In Case No. A15A1830, West appeals the trial court's rulings in various respects, and in Case No. A15A1831, NW Parkway cross-appeals. For the reasons explained below, we affirm in part and reverse in part.

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law [.]" OCGA § 9–11–56(c).

Summary judgments enjoy no presumption of correctness on appeal, and an appellate court must satisfy itself de novo that the requirements of OCGA § 9–11–56(c) have been met. In our de novo review of the grant [or denial] of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) Cowart v. Widener, 287 Ga. 622, 624(1)(a), 697 S.E.2d 779 (2010). When, as in this case, the parties file cross-motions for summary judgment, "each party must show [that] there is no genuine issue of material fact regarding the resolution of [the essential] points of inquiry and that each, respectively, is entitled to summary judgment; either party, to prevail by summary judgment, must bear its burden of proof." Morgan Enterprises, Inc. v. Gordon Gillett Business Realty, 196 Ga.App. 112, 395 S.E.2d 303 (1990). See also Wells Fargo Bank v. Twenty Six Properties, LLC, 325 Ga.App. 662, 754 S.E.2d 630 (2014) (accord). A grant of summary judgment must be affirmed if it is right for any reason, including for an alternate ground that the trial court chose not to address in granting summary judgment, so long as the movant raised the issue in the trial court and the nonmovant had a fair opportunity to respond. Georgia–Pacific, LLC v. Fields, 293 Ga. 499, 504(2), 748 S.E.2d 407 (2013) ; City of Gainesville v. Dodd, 275 Ga. 834, 839, 573 S.E.2d 369 (2002) ; Abellera v. Williamson, 274 Ga. 324, 326(2), 553 S.E.2d 806 (2001). The relevant facts that follow are undisputed unless otherwise noted.

On July 20, 2004, NW Parkway, as lessor, and Worldwide Asset Management, LLC ("Worldwide"), West's predecessor-in-interest, as lessee, executed the lease at issue for 70,000 square feet of office space for a 20–year term from August 1, 2004, to July 31, 2024. The lease was a so-called "triple net lease"1 that (in "Special Stipulation 3") made West responsible for "all expenses for the entire property and building[ ] of any nature whatsoever during the term of this lease," including property taxes, except that NW Parkway "shall be responsible for any expense directly associated with and actually incurred with respect to the concrete walls, concrete slab, and foundation." West "acknowledge[d] that the premises [were] in good order and repair" at the beginning of the lease and specifically agreed to maintain the premises at its own expense and to surrender the premises at the termination of the lease in as good condition as received, normal wear and tear excepted.

The contract (in "Special Stipulation 4") allowed West the option of terminating the contract at five year intervals, at the end of the fifth, tenth, and fifteenth years, provided, inter alia, that, "for said option to be valid and effective, [West] shall ... not be in default under any of the provisions of this lease" and that West shall "provide [NW Parkway] with written notice (90) days in advance of the end of the [five-year interval]." In the event of such early termination, the lease provided that West would continue to pay rent for an additional six months and vacate the premises by the end of that period. The first five-year interval ended July 31, 2009, meaning that the contract required West to give notice on or before May 2, 2009, to exercise the early-termination option, and to vacate by January 31, 2010.

In early 2008, NW Parkway obtained a professional inspection to determine whether West was maintaining the property. The inspector noted evidence of ineffective drainage and standing water in areas of the roof, as well as multiple areas that had been repeatedly patched but appeared likely to leak. The inspector concluded, "[b]ased on the number of layers of patching material and the deteriorated condition of the top layer of many patches, the roof is due for replacing" and also recommended certain other repairs. Based on the inspector's report, NW Parkway requested in a letter dated February 27, 2008, that West "correct the[ ] deficiencies" indicated in the report, including by replacing the roof. In a letter dated June 2, 2008, West asserted that it was NW Parkway's sole obligation to replace the roof and that West was obligated only to maintain the roof in as good condition as received. West did not replace the roof.

In a letter dated July 10, 2008, NW Parkway notified West that it was in default under the lease for failure "to perform and pay for the required roof and other repairs" and demanded that West cure the default within thirty days. After thirty days, NW Parkway notified West that it had failed to cure the default within the time allowed and that it had therefore lost its "ability to cure [its] default under the Lease" and "forfeited [its] right to terminate the Lease prior to July 31, 2024 under Special Stipulation 4[.]" When NW Parkway sent its contractor to the property to replace the roof and perform other repairs, West denied the contractor access. In a letter dated August 15, 2008, West stated:

No permission has been granted to NW Parkway to send a roofing vendor to the premises. Unless there is an agreement to the contrary, [NW Parkway] has no right to enter upon the premises except with permission of [West].... As we have stated, West has repaired the roofs as appropriate during the lease term, and, will continue to do so. If [NW Parkway] removes the existing roof system, it will be impossible for West to make repairs. It is the tenant's role under the Lease Agreement to establish the type of repairs which are appropriate for the roofs, not [NW Parkway's] role. If [the contractor] attempts to enter the premises, it will be turned away.

In October 2008, NW Parkway filed this action, seeking damages and an emergency restraining order to compel West to allow the replacement of the roof and other necessary repairs. In November 2008, the trial court granted NW Parkway's request for a temporary restraining order ("TRO") and enjoined West from interfering with NW Parkway or its contractors from replacing the roof and repairing the exterior of the buildings. As the trial court noted, West claimed that the roof did not need to be replaced, referring to an evaluation performed by a roofing company it had engaged, but failed to present that company's report to the court. The court found that West had failed to adduce any evidence to contradict the evidence presented by NW Parkway that the roof needed to be replaced. After the court issued the TRO, NW Parkway's chosen contractor performed the work; the cost to replace the roof and repair the property was $384,226. In December 2008, West answered NW Parkway's complaint and asserted counterclaims for fraud, negligence, breach of contract, and setoff and requested a declaratory judgment that it was entitled to exercise its right to early termination.

On December 31, 2008, West sent a letter "to constitute [its] notice of early termination" pursuant to Special Stipulation 4. By letter dated January 26, 2009, NW Parkway "rejected" West's termination on the basis that West was "in breach of the lease for failing to pay expenses for the replacement of the roof and other repair expenses[,]" which prohibited West "from terminating the lease as the result of such failure." In March 2009, West filed a motion for partial summary judgment on its request for a declaratory judgment that it was entitled to exercise its right to early termination. At the same time, while maintaining its position that it was not responsible for replacing the roof under the lease, West filed a request for leave to pay into the registry of the court the disputed amount, $384,226, which was the amount NW Parkway spent to replace the roof and repair the buildings' exteriors. In its request to pay the funds into the registry of the court, West stated that it was seeking to preserve its right to terminate the lease at the end of the first five-year interval. In April 2009, NW Parkway amended its complaint, seeking $384,226 in damages for roof-related expenses, among other relief.

The trial court heard West's motion for partial summary judgment on April 23, 2009, less than two weeks before the deadline for giving notice of termination before the end of the first five-year interval. At the hearing, NW Parkway's counsel acknowledged that there was a question of fact whether the roof needed repair or needed replacement. West's counsel asked that, because the deadline was approaching, the court accept the money into the registry of the court so that West could cure any arguable default and stated, "If there's something else that we're required to do in order to cure...

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    • Georgia Court of Appeals
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    ...were told the repairs had been completed, and there is no evidence that they acted carelessly. See West Asset Mgmt. v. NW Parkway, LLC , 336 Ga. App. 775, 790-791 (7), 784 S.E.2d 147 (2016) (negligence claim that was based on improper repairs failed where there was no evidence defendants ac......
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    • United States
    • Mercer University School of Law Mercer Law Reviews No. 69-1, September 2017
    • Invalid date
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