Wheatley v. Dixie Mall 2003, LLC
| Decision Date | 10 February 2016 |
| Docket Number | No. CV–15–609,CV–15–609 |
| Citation | 482 S.W.3d 760 |
| Parties | George Wheatley d/b/a Velocity Sports Academy, Appellant, v. Dixie Mall 2003, LLC, Appellee. |
| Court | Arkansas Court of Appeals |
Everett, Wales & Comstock, by: Jason H. Wales, for appellant.
Conner & Winters, LLP, Fayetteville, by: Todd P. Lewis and Amber J. Prince, for appellee.
Appellant George Wheatley d/b/a Velocity Sports Academy (Wheatley) appeals from the Benton County Circuit Court's March 30, 2015 order for immediate possession and June 4, 2015 judgment in favor of appellee Dixie Mall 2003, LLC (Dixie). On appeal, appellant contends that (1) the trial court erred by issuing the writ of possession; (2) the trial court erred by not allowing appellant to introduce evidence as to the cost and types of improvements he had made to appellee's building between the time he signed the lease and the time he opened for business; and (3) the trial court's judgment awarding costs and attorney's fees to appellee should be reversed automatically if the court reverses its order for immediate possession. We affirm.
On February 10, 2015, appellee filed a complaint for unlawful detainer and writ of possession, alleging that appellant had violated the permitted-use provision of the lease by offering strength-and-conditioning classes, fitness-training classes, and exercise machines on the premises. Appellee alleged that it served appellant with the first written notice of violation on December 18, 2014 ("first notice"), and a second written notice of violation on January 27, 2015 ("second notice"). After appellant failed to comply with the notices, appellee alleged that it served appellant with a termination notice ("termination notice") on February 6, 2015. However, appellant refused to surrender possession. Therefore, appellee alleged in the complaint that appellant was in unlawful possession. Appellant filed an answer and objection to the writ of possession on February 13, 2015. In his answer, appellant generally denied that the activities violated the permitted-use provision of the lease. Additionally, appellant affirmatively pleaded that appellee's claims were barred by "waiver, laches, estoppel, unclean hands, and material breach of contract by [appellee.]"
A trial was held on February 26, 2015. At trial, Frank Cooper, the general manager at the Frisco Station Mall, testified that appellant sought to lease a space at the mall to open his batting-cage business and agility classes for team sports. Cooper explained that appellant failed to mention that he also wanted to offer strength-and-conditioning classes, Zumba classes, and exercise equipment. Another tenant in the mall, Planet Fitness, was already offering health, weight-loss, and fitness classes. Additionally, Planet Fitness's lease limited the activities of other tenants. Therefore, Cooper testified that section 1.1(h) of the lease permitted appellant to use the premises only for a batting-cage area and for speed or agility training. Furthermore, the provision specifically prohibited appellant from using free weights or exercise machines or from selling memberships for speed and agility training. He further testified that after appellant had placed rowing machines on the premises and offered adult workout and fitness classes, Planet Fitness filed a lawsuit against appellee based on appellant's violation of the permitted-use provision.
Cooper testified that the notices of violation were sent to appellant's home address, pursuant to the terms of the lease. The first notice was sent on December 18, 2014, after Planet Fitness complained that appellant was offering Zumba classes. After receiving the first notice, appellant agreed in a conversation that he would stop the Zumba classes. Cooper testified that he received confirmation that a second notice was delivered on January 29, 2015, after Planet Fitness had filed a lawsuit against appellee for appellant's violation of the permitted-use provision. Specifically, Planet Fitness alleged that appellant offered rowing machines and adult-workout classes. After appellant initially failed to respond to the second notice, Cooper testified that he contacted appellant. Appellant told Cooper that he did not receive the second notice because he had moved and was no longer living at the address listed in the lease. A series of emails and communications subsequently took place regarding the second notice, during which time appellant received a copy of the second notice. Cooper further testified that he visited the premises around 2:30 p.m. on February 4, 2015, and observed that the rowing machines were still available in the training area; therefore, a termination notice dated February 6, 2015, was delivered. Additionally, Cooper testified that appellant was still offering strength-and-conditioning classes, workout classes, and fitness classes for adults, in violation of the lease.
On cross-examination, Cooper admitted that section 3.1 of the lease permitted the landlord to recapture the premises and terminate the lease upon thirty days' notice to the tenant if the tenant changed its permitted use without the landlord's prior written consent. However, Cooper contended that sections 3.1 and 1.1 both applied. Cooper explained that, because appellant failed to comply with the permitted-use provision within twenty-four hours despite two notices of violation, he proceeded properly under section 1.1(h) because appellant never made a prior request to change his permitted use for section 3.1 to apply under these circumstances.
After appellant's counsel questioned Cooper regarding the improvements made to the premises, appellee's counsel objected on the basis of relevance. Appellant's counsel argued that the testimony was relevant because appellee "watched Mr. Wheatley repair their building at his expense not five months ago, and they're now trying to kick him out and keep the benefits of those repairs." The trial court sustained the objection, finding that the testimony had "nothing to do with permitted use." Appellant proffered that he spent about $50,000 on leasehold improvements between the time he signed the lease and the time he opened the business.
Appellant testified that he was the owner of Velocity Sports Academy and that he had signed the lease with Dixie in July 2014. He explained that his business consisted of batting cages and speed and agility training. However, he explained that the only way to increase speed and agility is through strength conditioning. He admitted that his business used a rowing machine but contended that it did not violate the permitted use because it did not have a motor or a plug. Appellant testified that he received the first notice on December 18, 2014, and that the notice cited Zumba classes as a violation of the permitted use. He testified that after receiving the first notice, he stopped offering Zumba classes. Although appellant moved and had his mail forwarded, he admitted at trial that it was his fault that he did not initially receive the second notice. He further indicated that he had received a copy of the second notice on February 3, 2015, but that he did not understand how he was in violation. Therefore, he testified that he took a guess and had the rowing machines removed on February 4, 2015, at approximately 3:00 p.m. or 4:00 p.m. However, after further cross-examination, he explained that the rowing machines were still on the premises but that they had been moved into the back hallway. Additionally, he admitted that the business still offered strength-and-conditioning classes and fitness-training classes. Appellant further testified that he had never requested to change the lease prior to his February 3, 2015 statement that he "would like to look at some adjustments in the lease," which was after he had received the second-notice violation. He stated that a termination notice was subsequently posted on the door on February 6, 2015, and that appellee filed a lawsuit on February 10, 2015, without giving him thirty days' prior notice.
At the conclusion of the trial, appellee's counsel orally argued that section 1.1(h) applied because it was the more specific provision of the lease and that section 3.1 did not apply because appellant did not request a change in the permitted use until after the second notice. Appellant's counsel, on the other hand, argued that section 3.1 applied and that the landlord had the right to terminate the lease only after thirty days' notice to the tenant. After hearing all oral argument, the trial court orally found that there had been a breach of the intended use and that the appropriate notices had been given.
A written order for immediate possession was filed on March 30, 2015. In that order, the trial court found that appellee was entitled to immediate, sole, and exclusive possession of the premises and ordered the clerk of court to issue a writ of possession in favor of appellee. After a subsequent motion for attorney's fees and costs and a hearing, the trial court awarded appellee $8,473.50 in attorney's fees and $230 in costs. A timely notice of appeal and amended notice of appeal were filed from these orders, and this appeal followed.
On appeal, appellant first contends that the trial court erred by issuing the writ of possession. Specifically, appellant argues that he did not violate the permitted-use clause of the lease, that appellee waived any right to terminate the lease and evict him, and that appellee failed to comply with the notice requirements of section 3.1 of the lease prior to filing suit. We disagree.
Our standard of review on appeal from a bench trial is not whether there was substantial evidence to support the finding of the circuit court, but whether the circuit court's findings were clearly erroneous or clearly against the preponderance of the evidence. See Omni Holding & Dev. Corp. v. C.A.G. Invs., Inc., 370 Ark. 220, 258 S.W.3d 374 (2007)
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