Bennett v. Waffle House, Inc.

771 So. 2d 370, 2000 Miss. LEXIS 249, 2000 WL 1730159
CourtMississippi Supreme Court
DecidedNovember 22, 2000
DocketNo. 1998-CA-01765-SCT
StatusPublished
Cited by5 cases

This text of 771 So. 2d 370 (Bennett v. Waffle House, Inc.) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bennett v. Waffle House, Inc., 771 So. 2d 370, 2000 Miss. LEXIS 249, 2000 WL 1730159 (Mich. 2000).

Opinion

ON MOTION FOR REHEARING

McRAE, Justice,

for the Court:

¶ 1. Robert A. Bennett and his wife, Mary Alice Bennett, (the Bennetts) have moved this Court for a rehearing of the May 25, 2000, per curiam affirmance of the judgment below. The motion for rehearing is denied.

¶ 2. The Bennetts appeal the chancellor’s decision that the addition of eighteen seats to a thirty-three-seat Waffle House restaurant by Waffle House, Inc. (Waffle House), the Bennetts’ lessee, did not violate the lease contract which contemplated the construction of a “standard Waffle House.” The judgment of the chancery court is affirmed.

FACTS AND PROCEEDINGS BELOW

¶ 3. This is a dispute over a contract formed in 1974, when Waffle House leased property in Biloxi from the Bennetts on which to construct a restaurant. The lease [371]*371was for a fifteen-year term renewable thereafter by Waffle House for seven terms of five years each. The rent was fixed per month for the primary term, with the rent for the renewal terms to be adjusted upward according to changes in the Consumer Price Index. The Bennetts designated Sawyer Real Estate as their agent for receipt of the rental payments.

¶ 4. The lease agreement did not specify the number of seats the restaurant would have. However, the lease agreement twice referred to a “standard Waffle House.” Bennett argues that this term limited the restaurant to thirty-three seats, and that the two expansions of the restaurant (to 43 seats in 1976 and 51 seats in 1993) therefore breached the lease agreement so as to render it null and void.

¶ 5. When the lease came up for renewal in 1989, the Bennetts refused to accept the rental payments until resolving the matters of Waffle House’s alleged breaches. In December, 1989, Waffle House chose to exercise the first of the lease agreement’s seven renewal options. Waffle House computed the monthly rental due according to the terms of the lease and forwarded a draft to real estate agent Lenwood Sawyer for the December rent. The Ben-netts refused to accept the December payment.

¶ 6. After receiving the January rental payment, Sawyer filed this interpleader action on January 16, 1990, which named the Bennetts and Waffle House as defendants and requested the court to inter-plead the funds and determine the parties’ entitlements. Waffle House cross-claimed against the Bennetts for their refusal to accept rental payments under the lease, and the Bennetts cross claimed against Waffle House to cancel the lease.

¶ 7. The Harrison County Chancery Court granted summary judgment in favor of Waffle House in 1991, finding that Waffle House did not breach the lease agreement. On appeal, the Mississippi Court of Appeals reversed the trial court’s grant of summary judgment in an unpublished decision, Bennett v. Sawyer Real Estate, Inc., 687 So.2d 763 (Miss.Ct.App.1996) (mem.), and this Court denied certiorari, 691 So.2d 1028 (Miss.1996) (table).

¶ 8. On remand, the chancellor found that the only ambiguous term in the lease was the phrase “standard Waffle House.” After hearing evidence on the matter, the chancellor agreed with the Bennetts that the phrase “standard Waffle House” meant a restaurant with thirty-three seats. The court went on to hold that Waffle House did not breach the agreement in making improvements to the building (i.e., that the parties had not contracted to limit the size of the building). The Bennetts have appealed with respect to the issues regarding breach of the lease agreement.

¶ 9. The Bennetts are aggrieved by the trial court’s exclusion of extrinsic evidence concerning the phrase “standard Waffle House,” and the chancellor’s ruling that the parties had not contracted to limit the size of the seating capacity. They raise three issues with various sub-issues.

¶ 10. Because we find that the chancellor was correct in finding that the parties had not contracted to limit the size of the building and that the lease was a ground lease, we will not address most of the issues raised, as this issue is dispositive. Thus, the exclusion of any extrinsic evidence to prove the meaning of the phrase “standard Waffle House,” if error, was harmless.

DISCUSSION

I. Expansions of the Restaurant’s Seating Capacity

¶ 11. The chancery court correctly decided that additions to the building in excess of thirty-three seats did not breach any of the lease provisions. For this reason, we affirm the judgment of the chancery court.

¶ 12. The Bennetts argue that the lease expressly limits the restaurant to a “standard Waffle House” and that Waffle House [372]*372stipulated that a “standard Waffle House” was one with thirty-three seats. The trial court ruled to the contrary, holding that “[t]he term ‘standard Waffle House’ is only descriptive in nature, and without further limitations does not denote a restriction on seating capacity.”

¶ 13. Waffle House argues that the lease was a ground lease. The Bennetts leased the property, an 80 feet by 300 feet lot, to Waffle House, and Waffle House was responsible for improvements which were the personal property of Waffle House. Waffle House points out that paragraph 5 of the lease provides that the lease is a “land lease only” and the lessor “does not agree to make any improvements erected or made on premises by Lessee.”

¶ 14. The only restriction in the lease was that any improvements be constructed on the westerly 60 feet of the property. Therefore, Waffle House argues, absent an express limitation in a lease provision specifying a maximum number of seats for the restaurant, the lease did not limit the number of seats and did not prohibit the expansions.

¶ 15. The Bennetts contend that the trial court erred in applying Ewing v. Adams, 573 So.2d 1364 (Miss.1990), to the instant case. In Ewing, the lease specified that the property was to be used for a drive-in theater but the lessee instead used it as a flea market. The Court held that restrictions intended to limit the use of property to a particular purpose should not be left to implication, but should be clearly defined and understood by the parties. The Bennetts argue that the instant case, unlike Ewing, does not involve the use of the property, and the issue is therefore whether the lease restricted the size of the building. The Bennetts are incorrect, and the fundamental principles of Ewing are applicable here.

¶ 16. In Ewing, this Court held that “The landlord is free to impose the restrictions on the tenant’s use of the property, but in light of the principle which gives the tenant free use, any restrictions are construed narrowly against the landlord.” Id. at 1368. We went on to state the rule to be applied in interpreting use-restricting lease provisions:

Applied to the specific instance in which a lease provision sets forth the use of the property, the authorities are in agreement that such a provision, absent a clear and specific indication that the landlord intended to limit the tenant’s use of the property, is generally permissive and not restrictive.

Id. at 1368.

¶ 17. Here, as in Ewing, the lease described the use to which the property was to be put, but does not contain a “clear and specific indication” that the description was intended to limit the use to a thirty-three-seat restaurant.

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Bluebook (online)
771 So. 2d 370, 2000 Miss. LEXIS 249, 2000 WL 1730159, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bennett-v-waffle-house-inc-miss-2000.