BUFORD-CLAIRMONT CO., LTD. v. Cato Corp.

526 S.E.2d 104, 241 Ga. App. 50, 99 Fulton County D. Rep. 4428, 1999 Ga. App. LEXIS 1554
CourtCourt of Appeals of Georgia
DecidedNovember 22, 1999
DocketA99A1394, A99A1395
StatusPublished
Cited by6 cases

This text of 526 S.E.2d 104 (BUFORD-CLAIRMONT CO., LTD. v. Cato Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BUFORD-CLAIRMONT CO., LTD. v. Cato Corp., 526 S.E.2d 104, 241 Ga. App. 50, 99 Fulton County D. Rep. 4428, 1999 Ga. App. LEXIS 1554 (Ga. Ct. App. 1999).

Opinions

Blackburn, Presiding Judge.

In this action involving a commercial lease dispute, Buford-Clairmont Company, Ltd., the lessor, appeals the trial court’s partial grant of summary judgment to Cato Corporation, the lessee, contending that the trial court erred by: (1) determining as a matter of law that Cato had a valid right to close its store in the leased premises and (2) finding that Cato did not fraudulently induce Buford-Clairmont to enter into an amendment of the original lease agreement between the parties. Cato cross-appeals, contending that the trial court erred by: (1) finding, with regard to the store closing issue, that a question of fact remained with regard to Cato’s underlying intentions in deciding to close the store and (2) holding that Cato was estopped from terminating the lease.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). A de novo standard of review applies to an appeal from a grant [or denial] of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 SE2d 684) (1997).

On June 10, 1994, Buford-Clairmont and Cato entered into a commercial lease agreement pursuant to which Cato leased space in Buford-Clairmont’s shopping center to house a store which sold women’s apparel. Article 28 of the lease provides:

LESSOR covenants and agrees that during the term of this Lease and any extensions or renewals thereof, should LESSOR directly or indirectly enter into any leases in the Shopping Center, or any enlargement thereof, including any out-parcels, with any national or regional women’s apparel chain stores classified as popular priced and carrying competitive merchandise, with any store specializing in large-sized women’s apparel, or with more than one store special[51]*51izing in specific price point sales of ladies’ and girls’ apparel ... in such event, the monthly fixed rent shall be reduced by one-half... that set forth herein for the initial Lease period and any extension or renewal thereof, or LESSEE, at its option, may elect to cancel this Lease upon sixty (60) days notice in writing.

On October 5, 1994, Buford-Clairmont entered into a lease with Simply Fashion Stores, Ltd., a competitor of Cato, and, approximately two months later, Cato notified Buford-Clairmont that it believed Article 28 had been violated and that it would begin paying half of the rental amounts stipulated in the contract. On November 30, 1995, Buford-Clairmont sued Cato for failing to pay the full amount of rent and sought a declaratory judgment that it had not violated Article 28.

After negotiations, the parties agreed to settle this lawsuit and, through correspondence, devised an amendment to the lease between the parties (the First Lease Amendment).1 This amendment altered the rental payments for the period of September 1, 1996 through January 31, 1998, changing them from a fixed amount to an amount based on a percentage of sales. Article 1 of the First Lease Amendment provides:

Effective as of September 1,1996 through January 31,1998, LESSEE’S obligation to pay fixed rent under the Lease, shall abate and in lieu thereof LESSEE shall pay LESSOR, on a monthly basis, an amount equal to four and one-half percent ... of gross retail sales, if any, as defined in the Lease, made from the Premises, payable within thirty (30) days after the end of each month.

(Emphasis supplied.)

Cato prepared the First Lease Amendment, the material terms of which Buford-Clairmont suggested, and forwarded it to Buford-Clairmont, which executed the document. However, Cato subsequently refused to sign the amendment, and Buford-Clairmont brought an action to enforce the settlement agreement before the Superior Court of Fulton County. On January 21, 1997, that court determined that the settlement, as reflected by the First Lease Amendment and correspondence between the parties, was binding, and attorney fees were imposed on Cato. On January 30, 1997, Cato mailed notice to Buford-Clairmont that it had decided to close its [52]*52store due to operational decisions and that it was exercising its option under Article 28 to terminate the lease.

Buford-Clairmont subsequently brought this action against Cato, contending that: (1) Cato breached the lease by closing its store; (2) Cato fraudulently induced Buford-Clairmont into the First Lease Amendment; and (3) Cato damaged the property during its tenancy.2 Buford-Clairmont also sought a declaratory judgment that Article 28 of the lease had not been violated. Cato counterclaimed, contending that Buford-Clairmont had breached the lease by renting to a competitive retailer and requested a declaratory judgment to that effect.

Case No. A99A1394

1. Buford-Clairmont contends that Cato had no right to cease store operations, arguing that the imposition of rent based on percentage sales carried with it an implied agreement to stay open. This contention is untenable, as the lease agreement explicitly provides. Cato with the right to close its store.

Article 12 of the lease provides:

The Premises may be occupied only for the purpose of the display and sale of ladies’ and girls’ apparel, accessories and allied lines commonly sold from time to time in THE CATO CORPORATION affiliated stores. Nothing in this Lease shall be deemed to constitute an obligation on the part of Lessee to operate its business in the Premises at any time.

(Emphasis supplied.) The execution of the First Lease Amendment did not vitiate this provision, as Buford-Clairmont argues, because Article 6 thereof states: “Except as herein amended, all other terms, conditions and covenants of the Lease shall remain unchanged and continue in full force and effect.” Cato retained the right to close its store following the execution of the First Lease Amendment, and" Buford-Clairmont’s reliance on alleged implied provisions cannot withstand the mandate of contradictory express provisions. Moreover, the First Lease Amendment links rental payments to a percentage of sales, if any, and thereby explicitly undermines Buford-Clairmont’s argument even further. Despite Buford-Clairmont’s pleas, this Court has no choice but to follow the explicit language of the lease agreement, and Buford-Clairmont must suffer the consequences of its voluntary acceptance of what ultimately turned out to be a bad business deal.

[53]*532. Buford-Clairmont contends that Cato fraudulently induced it into entering the First Lease Amendment, arguing that Cato knew it was going to close the store at the time the amendment was negotiated and sought a percentage calculation to avoid being responsible for any rent. Again, this argument is untenable.

“The tort of fraud in Georgia has five elements: (1) false representation by defendant; (2) scienter; (3) intention to induce plaintiff to act or refrain from acting; (4) justifiable reliance by plaintiff; and (5) damage to plaintiff.” Westminster Holdings, Ltd. v. Weatherspoon, 237 Ga. App. 819, 822 (2) (517 SE2d 80) (1999).

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BUFORD-CLAIRMONT CO., LTD. v. Cato Corp.
526 S.E.2d 104 (Court of Appeals of Georgia, 1999)

Cite This Page — Counsel Stack

Bluebook (online)
526 S.E.2d 104, 241 Ga. App. 50, 99 Fulton County D. Rep. 4428, 1999 Ga. App. LEXIS 1554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buford-clairmont-co-ltd-v-cato-corp-gactapp-1999.