WPD Ctr., LLC v. Watershed, Inc.

• Decision Date: 21 November 2014
• Docket Number: No. A14A1429.,A14A1429.
• Citation: 330 Ga.App. 289,765 S.E.2d 531
• Court: Georgia Court of Appeals
• Parties: WPD CENTER, LLC et al. v. WATERSHED, INC. et al.

330 Ga.App. 289

765 S.E.2d 531

WPD CENTER, LLC et al.

v.WATERSHED, INC. et al.

No. A14A1429.

Court of Appeals of Georgia.

Nov. 21, 2014.

Reconsideration Denied Dec. 10, 2014.

Parker, Hudson, Rainer & Dobbs, Peter Frank Busscher, Eric Jon Taylor, Atlanta, Steven Craig Rosen, for Appellants.

Bloom Sugarman Everett, Simon Howard Bloom, Stephanie A. Everett, Atlanta, for Appellees.

Opinion

ANDREWS, Presiding Judge.

Watershed, Inc. entered into a commercial lease agreement with WPD Center, LLC, to operate a restaurant on premises owned by WPD. Watershed sued WPD for breach of the lease, and WPD answered and counterclaimed asserting that Watershed breached the lease.¹ WPD appeals from the trial court's order granting partial summary judgment in favor of Watershed and denying WPD's motion for summary judgment.

To prevail on a motion for summary judgment, “the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.” Lau's Corp. v. Haskins, 261 Ga. 491, 491, 405 S.E.2d 474 (1991) ; OCGA § 9–11–56. The moving party on summary judgment may carry this burden by affirmatively presenting evidence which negates an essential element of the nonmoving party's claim, or by demonstrating the absence of evidence to support an essential element of the nonmoving party's claim. Lau's Corp., 261 Ga. at 491, 405 S.E.2d 474. Applying these principles to WPD's claims, we affirm in part and reverse in part.

1. WPD claims that the trial court erred by denying its motion for summary judgment on all ten counts of Watershed's complaint on the basis of defenses asserting that Watershed's suit for breach of the lease was barred by the doctrine of res judicata, or, in the alternative, by an agreement between the parties.

(a) It is undisputed that, prior to the present suit (filed in Fulton County Superior Court), WPD filed a dispossessory proceeding against Watershed in the Magistrate Court of DeKalb County; that Watershed filed counterclaims against WPD in the dispossessory seeking damages in excess of the $15,000 jurisdictional limit of the magistrate court; and that, when the dispossessory was dismissed, the counterclaims were dismissed with prejudice.

The doctrine of res judicata prevents the re-litigation of all claims which have already been adjudicated, or which could have been adjudicated, between identical parties or their privies in identical causes of action. Before res judicata applies, three prerequisites must be satisfied—(1) identity of the cause of action, (2) identity of the parties or their privies, and (3) previous adjudication on the merits by a court of competent jurisdiction.

Setlock v. Setlock, 286 Ga. 384, 385, 688 S.E.2d 346 (2010). For purposes of res judicata, a voluntary dismissal with prejudice operates as an adjudication on the merits. Fowler v. Vineyard, 261 Ga. 454, 456, 405 S.E.2d 678 (1991). Watershed concedes that, based on the counterclaims it filed in the prior dispossessory action, there is identity of the cause of action and the parties with respect to its present claims against WPD, and that the only issue is whether adjudication on the merits occurred in a court of competent jurisdiction.

Each magistrate court and each magistrate thereof shall have jurisdiction and power over ... [t]he trial of civil claims ... in which exclusive jurisdiction is not vested in the superior court and the amount demanded or the value of the property claimed does not exceed $15,000.00 ... [and] [t]he ... issuance of writs and judgments in dispossessory proceedings.

OCGA § 15–10–2(5), (6) ; Setlock, 286 Ga. at 385, 688 S.E.2d 346. “[A]lthough the magistrate court had jurisdiction over [WPD's] dispossessory action, it did not have jurisdiction to render a binding judgment on [Watershed's] counterclaims ... which sought money damages that exceeded the $15,000 jurisdictional limit of the magistrate court.” Setlock, 286 Ga. at 385, 688 S.E.2d 346 Because the magistrate court was not a court of competent jurisdiction to resolve those claims on the merits, the trial court correctly ruled that the doctrine of res judicata did not bar Watershed from reasserting the same claims in the present suit, and correctly denied WPD's motion for summary judgment on this ground. Id. at 386, 688 S.E.2d 346 ; OCGA § 9–11–56.

(b) The trial court also rejected WPD's claim that there was an agreement between the parties in conjunction with dismissal of the dispossessory action that resolved the dispute and barred Watershed's present claims. The record shows that the parties signed a letter agreement recognizing that the dispossessory action and the counterclaims in the magistrate court were being dismissed, and further stating that “[t]he parties hereby further agree that all obligations owed and to be owed by any party under the lease are hereby reaffirmed.” The trial court found the plain meaning of the letter (which contained no waiver or release language) was that the parties were reaffirming the enforceability of the lease, and that there was no settlement of the present claims based on the lease. In fact, WPD conceded in the trial court that the letter was an agreement between the parties “to reaffirm their obligations under the Lease.” Although the trial court ultimately based its ruling on other grounds, under the right for any reason rule, we affirm the trial court's denial of WPD's motion for summary judgment on this claim. City of Gainesville v. Dodd, 275 Ga. 834, 573 S.E.2d 369 (2002) ; OCGA § 9–11–56.

(c) WPD also contends that it was entitled to summary judgment because the record shows that, when the parties dismissed the dispossessory action and counterclaims, the parties filed a “Joint Stipulation of Dismissal” in the magistrate court. Because this claim was not asserted by WPD in the trial court as a basis for summary judgment, and was not ruled on by the trial court, it presents nothing for appellate review. Calhoun GA NG, LLC v. Century Bank of Ga., 320 Ga.App. 472, 477, 740 S.E.2d 210 (2013).

2. WPD claims that the trial court erred by granting summary judgment in favor of Watershed on its claim that WPD breached the lease agreement by refusing to consent to a sublease of the premises requested by Watershed.

The lease contains a provision that states: “It is agreed that [Watershed] may have the right to sub-lease the premises in part or in its entirety provided [WPD] is given prior written notice and [Watershed] receives [WPD's] approval (which will not unreasonably be withheld and shall be subject to the criteria set forth in Paragraph 15.02).” Paragraph 15.02 of the lease sets forth criteria for WPD to consider when evaluating whether or not to approve a proposed sublease, including the type of business the subtenant proposes to operate, its reputation and expertise, and adequate assurance of the subtenant's financial condition, stability, and ability to pay the rent.

[A] lease clause providing that a lessor cannot unreasonably withhold consent to assign the lease is a covenant upon the landlord ... [U]nder such a clause, the term “reasonable” cannot comprehend arbitrary or capricious reasons, or merely personal preferences ... [-] the term refers to considerations of fairness and commercial reasonableness. Although the question of reasonableness and unreasonableness is most often a jury issue, in plain and palpable cases the determination may be made by the court.

Pakwood Indus., Inc. v. John Galt Assoc., 219 Ga.App. 527, 529, 466 S.E.2d 226 (1995) (punctuation and citations omitted); Stern's Gallery of Gifts, Inc. v. Corporate Property Investors, Inc., 176 Ga.App. 586, 592–597, 337 S.E.2d 29 (1985). Where a lease contains a clause requiring that such consent not be unreasonably withheld, a...