Warren v. Variety Wholesalers, Inc.

• Decision Date: 21 November 1995
• Docket Number: No. 95-1199,95-1199
• Citation: 70 F.3d 1264
• Parties: NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. Calvin WARREN; Bernard Warren; J.H. Woods, Sr., Plaintiffs-Appellants, v. VARIETY WHOLESALERS, INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1264

70 F.3d 1264

NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.

Calvin WARREN; Bernard Warren; J.H. Woods, Sr., Plaintiffs-Appellants, v. VARIETY WHOLESALERS, INCORPORATED, Defendant-Appellee.

No. 95-1199.

United States Court of Appeals, Fourth Circuit.

Submitted Oct. 31, 1995.

Decided Nov. 21, 1995

Appeal from the United States District Court for the District of South Carolina, at Beaufort. Dennis W. Shedd, District Judge. (CA-94-1087-9-19)

Clyde A. Eltzroth, Jr., John E. Parker, PETERS, MURDAUGH, PARKER, ELTZROTH & DETRICK, Hampton, South Carolina, for Appellants. Arthur C. Zeidman, General Counsel, VARIETY WHOLESALERS, INC., Raleigh, North Carolina; L. Diane Tindall, WYRICK, ROBBINS, YATES & PONTON L.L.P., Raleigh, North Carolina, for Appellee.

D.S.C.

AFFIRMED.

Before HALL and MICHAEL, Circuit Judges, and CHAPMAN, Senior Circuit Judge.

OPINION

PER CURIAM:

Calvin Warren, Bernard Warren, and J.H. Woods, Sr., ("Appellants") appeal from the district court's order entering summary judgment for Variety Wholesalers, Inc., in this diversity action in which Appellants sought additional rent based on the percentage-gross-profit-in-excess-of-base-rent provision. Appellants argued that the lease required continuous operation of a variety store and that Variety Wholesalers' transfer of its business to another location constituted a breach of the contract. We have granted Appellants' motion to submit this appeal on the briefs, and we now affirm the judgment of the district court.

In October 1968, Appellants and Macks Stores, Inc., entered into a lease "for the purpose of a general merchandise and variety store business." The contract provided that the leased building would be constructed according to Macks Stores' specifications. Macks Stores agreed to pay monthly rent of $1,152.52 or three-and-a-half percent of gross retail sales, whichever was greater. The rental amount based on gross retail sales was to be computed at the close of the fiscal year and paid within sixty days.

In March 1990, the Appellants and Maxway Corporation--formerly Macks Stores, Inc.--extended the original lease to June 1994, with two options to renew for periods of five years. Four days after the lease extension, Maxway assigned the lease to Variety Wholesalers, Inc., who operated a variety store on the leased premises.

On March 1992, Variety Wholesalers discontinued its business on the leased premises. Variety Wholesalers subsequently, and with Appellants' consent, sublet the building to be used in part as a clothing store and in part as a game room. Variety continued to pay Appel lants the $1,152.52 base monthly rent. In June 1993, after the sublessee abandoned the leased premises, Variety Wholesalers repossessed the property.

In April 1994, Appellants filed this action against Variety Wholesalers seeking additional rent based on gross retail sales from March 1992--when Variety Wholesalers discontinued its operations at the location leased from Appellants--until June 1994--when the lease term expired. The district court entered summary judgment for Variety Wholesalers, finding that the lease did not require that the tenant continuously operate a variety store on the premises; therefore, Appellants were not entitled to rent in excess of the stated minimum.

Appellants contend that the lease, as a whole, incorporates the parties' intent that the lessee, Variety Wholesalers, continuously operate a variety store on the premises in order to generate the highest possible rent. Although the stated purpose of the lease was to operate "a general merchandise and variety store business," this statement of purpose, without more, does not restrict the use of the premises to that particular purpose. South Carolina has determined that "in the absence of an exclusion of other purposes, a lease for a specific purpose will be regarded as permissive instead of restrictive." Chassereau v. Stuckey, 342 S.E.2d 623, 624 (S.C.Ct.App.1986). Such leased property may be used for any lawful purpose for which the property may be adapted. Id.; see Shropshire v. Prahalis, 419 S.E.2d 829, 830 (S.C.Ct.App.1992) (distinguishing Chassereau; lease expressly prohibited use of property for any purpose other than stated). As the district court...