Wright v. IC Enters., Inc.

• Decision Date: 21 November 2014
• Docket Number: No. A14A0809.,A14A0809.
• Citation: 765 S.E.2d 484,330 Ga.App. 303
• Court: Georgia Court of Appeals
• Parties: WRIGHT et al. v. IC ENTERPRISES, INC. et al.

330 Ga.App. 303

765 S.E.2d 484

WRIGHT et al.

v.IC ENTERPRISES, INC. et al.

No. A14A0809.

Court of Appeals of Georgia.

Nov. 21, 2014.

Reconsideration Denied Dec. 11, 2014.

Certiorari Denied April 20, 2015.

O'Kelley & Sorohan, Lawrence Lee Washburn IV, Duluth, for Appellants.

O'Dell & O'Neal, Leslie Dean O'Neal, Marietta, for Appellees.

Opinion

BRANCH, Judge.

This is a landlord-tenant dispute concerning two commercial properties in Doraville. On motions for summary judgment, the trial court ruled that the lease governing one of the properties was so riddled with errors as to be unenforceable, that undisputed facts showed that the landlord breached a post-lease agreement to improve that property for the tenant's benefit, that the tenant was not liable for any rent or fees associated with either property, and that the landlord was not entitled to retain the tenant's security deposits. Because these rulings were erroneous, we reverse.

In reviewing a trial court's ruling on a motion for summary judgment, we conduct a de novo review to determine whether the undisputed facts warrant judgment as a matter of law. OCGA § 9–11–56 ; Vick v. Tower Place, L. P., 268 Ga.App. 108, 601 S.E.2d 348 (2004). “[T]he opposing party should be given the benefit of all reasonable doubt, and the court should construe the evidence and all inferences and conclusions arising therefrom most favorably toward the party opposing the motion.” Eckerd Corp. v. Alterman Properties, Ltd., 264 Ga.App. 72, 74, 589 S.E.2d 660 (2003) (footnote omitted).

So viewed, the record shows the following relevant facts. The plaintiff/appellant is the landlord, Joseph Jerry Wright, individually and as trustee of the Wright IV Trust d/b/a Y & W Partnership (“Wright”), and the defendants/appellees are the tenant, IC Enterprises, Inc. (“ICE”), and its CEO, Il C. Park d/b/a National Supply (“Park”). Beginning in 1999, the parties and their predecessors executed various leases and amendments thereto in connection with two parcels of property-a 14,700 square foot warehouse and a smaller commercial space on the same street. Because the amendments refer to and incorporate previous leases, a detailed description of the documents is necessary.

The larger property. In May 1999, Wright entered into a detailed three-year lease with Young Choi d/b/a National Supply for the larger property. The lease gave the property's address (3206 and 3208 Oakcliff Industrial Street) and square footage (14,700), and it listed a base rental amount as well as a monthly common area maintenance (“CAM”) fee. The lease further provided that the tenant would pay for utilities, keep the premises “in good order, condition and repair,” and pay attorney fees “[i]f any rent owing under this Lease is collected by or through an attorney at law.”

In May 2002, Wright and Choi executed a one-page “1st Lease Amendment” which was “[t]o be attached to and made part of” the May 1999 lease and which extended the lease term for one year. In January 2003, Wright acknowledged in writing that the tenant had changed from Choi to ICE, reflecting Park's purchase of Choi's interest in National Supply. In May 2004 and May 2005, Wright and ICE executed two more amendments, both confusingly titled “2nd Lease Amendment,” that were “[t]o be attached to and made part of” the May 1999 lease and that further extended the lease term through May 2008.

In April 2008, Wright and ICE executed a “3rd Lease Amendment” that is the main subject of this dispute. This amendment listed the property as the 14,700 square foot warehouse space at 3206 and 3208 Oakcliff Industrial Street in Doraville, extended the lease term for three more years, raised the rent, and kept the same CAM fee listed in the original lease. As with the previous amendments, the “3rd Lease Amendment” specifically provided that “[a]ll other terms and conditions of original lease are hereby reconfirmed as being in full force and effect.” Unlike the previous amendments, however, the “3rd Lease Amendment” recited that it was “[t]o be attached to and made part of that certain lease dated the 12th day of January 2007 between [Wright] as Landlord, and, Young Choi d/b/a IC Enterprises, Inc., later amended to I.C. Park d/b/a National Supply, as Tenant.” (Emphasis supplied.)

Smaller property. In March 2005, Wright entered into a detailed agreement with Michael and Loudi Aoun to lease a small commercial parcel for three years. Like the lease pertaining to the larger property, this lease provided that the tenant would pay utilities and a CAM fee; it also provided that the prevailing party in an action brought to enforce the lease could recover reasonable attorney fees. In May 2005, the lease was amended to reflect the tenant's relocation down the street to a similar property also owned by Wright.¹

On January 12, 2007, Wright and the Aouns executed a “Lease Assignment” that amended the March 2005 lease, as amended in May 2005, to reflect that ICE was the new tenant. Notably, the date of this assignment is the same date to which the “3rd Lease Amendment” for the larger property refers. And in February 2008, Wright and ICE executed a “2nd Lease Amendment” for the smaller property which was “[t]o be attached to and made part of that certain lease dated the 12th day of January 2007” and which extended the lease term through April 2011.

The dispute. At some point in 2008, Park determined that National Supply needed a new business license in the name of its new owner, ICE. In July 2008, Park learned that the county would not issue a certificate of occupancy, a prerequisite for a business license, unless a sprinkler system or fire detection system was installed at the larger property. Park's assistant, Lisseth Morales, appealed to Wright's property manager, Katherine Warden, who offered to hire a consultant or “expediter” to help ICE negotiate with the county. In November 2008, Warden sent Morales the following e-mail:

[Wright] had agreed to hire the expediter to facilitate getting your business license/CO, which is NOT our responsibility. I will have them contact you to set up a meeting to resolve this issue. Your lease does not expire until May, 2011. If the county forces the issue to install the sprinkler system or fire detection system with smoke and heat and removal and draft curtains, the Landlord will pay for it.... We hope that you will continue to work in good faith to get your business license.... Please let us know asap, end of today latest, if you are continuing to move forward to break your lease and vacate the Premises.

Morales responded:

We do not wish to deal with an expediter regarding the CO matters. Our lawyer has recommended that we not deal with an expediter because we are working to vacate the premises as we have previously told you. We will let you know the moving out date in advance.

Despite Morales's statement that ICE would be vacating the premises, Warden offered other options that she hoped would assuage the county's fire worries, such as installing emergency lights at Wright's expense and having ICE upgrade its fire extinguishers, but ICE refused to pay for the extinguishers. Warden also offered to relocate ICE to a different property owned by Wright where it could obtain a certificate of occupancy without trouble, but ICE, in Park's words, “ignore[d]” this offer.

In January 2009, Warden sent Park a letter regarding the sprinkler system:

As for the sprinkler, we still must submit and have the county come out beforehand to evaluate the situation.... If there is no other alternative to installing the sprinkler, it will be done. Please address the other items and we will move forward with the county.

Park, however, responded that “the only best way to solve the problem is to install the sprinkler.” Ultimately, Warden informed Park that the least expensive sprinkler system she could find cost more than Wright could afford. There is no evidence in the record that ICE ever tried to get a certificate of occupancy using the alternatives that Warden had suggested.

In November 2009, Park notified Warden that ICE would be vacating both properties by January 31, 2010. ICE paid the rent for both properties through that date, at which point it moved to a new location. The properties were unoccupied until June 2010, when new tenants apparently moved in.

Wright sued Park and ICE for breach of the lease agreements, seeking unpaid rent, utilities, and CAM fees from February through June 2010 for both properties, the cost of various repairs to the larger property, and attorney fees. Park and ICE answered, admitting that ICE had occupied the premises but denying the existence of any enforceable lease agreements and asserting various counterclaims seeking, among other things, the return of ICE's security deposit.

The parties filed cross-motions for summary judgment, which the trial court resolved in favor of Park and ICE. The court ruled that due to errors in the “3rd Lease Amendment,” no enforceable lease agreement existed with respect to the larger property; ICE was thus a tenant-at-will not liable for any unpaid rent because it gave the requisite 60 days' notice of its intent to vacate the premises. Further, the court ruled, even if the “3rd Lease Amendment” was enforceable, ICE was not liable for utilities, CAM fees, or attorney fees with respect to either property. The court also concluded that Wright had breached an enforceable promise to install a sprinkler system in the larger property, thereby foreclosing his right to seek rent for that property. Finally, the court held that Wright failed as a matter of law to prove that ICE had caused any compensable damage to the larger property and that ICE was entitled to the return of its security deposit.

1. Wright argues that the trial court erred by finding that the lease pertaining to the larger property was not an enforceable contract. In its order, the court highlighted three errors in the “3rd Lease Amendment” executed in April 2008:

1) it begins by

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