Circle K Stores, Inc. v. T. O. H. Associates, Ltd.

734 S.E.2d 752, 318 Ga. App. 753, 2012 Fulton County D. Rep. 3843, 2012 Ga. App. LEXIS 989
CourtCourt of Appeals of Georgia
DecidedNovember 26, 2012
DocketA12A1595
StatusPublished
Cited by13 cases

This text of 734 S.E.2d 752 (Circle K Stores, Inc. v. T. O. H. Associates, Ltd.) 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
Circle K Stores, Inc. v. T. O. H. Associates, Ltd., 734 S.E.2d 752, 318 Ga. App. 753, 2012 Fulton County D. Rep. 3843, 2012 Ga. App. LEXIS 989 (Ga. Ct. App. 2012).

Opinion

PHIPPS, Presiding Judge.

The trial court granted summary judgment to T. O. H. Associates, Ltd. (TOH) in TOH’s suit against Circle K Stores, Inc., alleging that Circle K breached the terms of a lease and an assignment and assumption of lease by failing to pay rent under the terms therein.

Circle K appeals, contending that the trial court erred in granting summary judgment to TOH because: (1) TOH’s acceptance of partial rent payments created a question of fact as to whether TOH departed from the material terms of the lease; (2) the lease had been terminated and thus Circle K had no obligation to pay the rent and costs accrued thereafter; (3) a question of fact remains as to the monthly rent due; and (4) a question of fact exists as to whether TOH properly mitigated its damages. For the reasons that follow, we affirm the grant of summary judgment as to liability, vacate the judgment as to damages, and remand the case to the trial court on the issue of damages.

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as [754]*754a matter of law.”1 “In our de novo review of the grant of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.”2

On or about November 9, 1987, TOH entered into a lease with National Convenience Stores, Inc. for the lease of certain real property. TOH was the lessor, and National Convenience was the lessee. According to the lease, National Convenience intended to construct a building and other improvements to the property for the purpose of operating a convenience store with self-serve gasoline. The lease was for a term of 25 years that would expire on or about November 9,2012.

On or about April 29, 1994, National Convenience assigned its interest in the lease to Circle K. The lease was subsequently assigned and re-assigned to various entities, but with Circle K remaining as a guarantor, under the terms of an assignment and assumption of lease document. In October 2009 and January 2010, TOH notified Circle K in writing of a delinquency in rental payments for the property by one of the assignees. To its notices, TOH attached documents showing rental and payment histories which showed full and partial rent payments past due from January 2009 to October 2009 and January 2010, respectively.

In March 2010, TOH filed a complaint alleging that Circle K breached the lease and assignment and assumption of lease by failing and refusing to pay, among other things, the monthly rent from February 1, 2009 to March 1, 2010, according to the terms of the documents. TOH later moved for summary judgment and submitted another invoice showing full and partial rent payments past due from January 2009 to April 1, 2011.

1. Circle K contends that the trial court erred in granting summary judgment to TOH because Circle K was not liable to TOH for rent under the lease terms. Circle K asserts that TOH had accepted partial rent payments from February 2009 to March 2011, and that “without proper notice of its intent to maintain the exact terms of the lease ... a question of fact [exists] as to whether the parties departed from the strict terms of the lease,” and thus, as to “what lease terms were in effect.”

A mutual departure from the terms of an agreement results in a quasi-new agreement suspending the original terms of [755]*755the agreement until one party has given the other reasonable notice of its intent to rely on the original terms.... The question whether the parties’ mutual conduct caused a waiver and effected a quasi-new agreement ordinarily is a question for the jury. . . .3

TOH’s manager deposed that although dating back to January 2009, TOH accepted partial rent payments from the current tenant (an assignee), TOH did not accept the partial rent payments “without identifying to the tenant that he’s underpaying his rent.” The manager deposed that he met with the tenant “probably once a month and attempted] to collect rent from him.” The manager deposed that TOH accepted the partial payments to offset and mitigate loss. When asked whether he had ever “said to [the tenant], You need to pay in full or we’re going to remove you from the property,” the manager deposed ‘We have said that to him.” And regarding the history of the lease prior to the current tenant, the manager deposed that “there were multitudes of defaults in this lease, almost monthly, from all of the tenants from the beginning,” and affirmed that “Circle K has in the past corrected any deficiency.”

To support its position, Circle K relies upon B-Lee’s Sales Co. v. Shelton,4 but that case is distinguishable. There, the landlord twice agreed to a reduced rate of rent and told the tenants to just “do the best you can” in making rent payments.5 In the present case, there was no evidence that any departure from the lease regarding rental payments was mutual, or that TOH agreed to waive the tenant’s liability for the shortfall between the amount of rent required by the lease documents and the partial payment amounts which TOH accepted to mitigate its loss.

“[0]ral modifications as to those matters in a contract required by the Statute of Frauds to be in writing are ineffective unless the contract as so modified has been acted on or performed by one of the parties.”6 One reason the performance of an oral modification to a written contract is an exception to the general rule is that

[a] plaintiff having accepted the benefits arising under the contract after being notified of an anticipated breach, and not having given notice of his intention to rely on its exact [756]*756terms, but having continued to accept the benefits thereunder, may not recover for such alleged breach or failure to perform fully the complete terms of the original agreement.7

There was no evidence that the current tenant notified TOH that it (the tenant) anticipated breaching the contract, thus barring TOH from recovering for such breach or failure to perform fully the complete terms of the original agreement. “[W]here... a modification of the written contract has been agreed to by all parties, performed by one and accepted by the other, there is a waiver of the provisions of the original contract as to rental amount.”8 As Circle K has failed to point to any agreement by TOH to modify the terms of the lease or assignment and assumption of lease, TOH has reserved its right to enforce that provision of the written contract relating to the rental amount. Accordingly, the trial court properly granted summary judgment to TOH in this regard.

2. Circle K contends that the trial court erred in granting summary judgment to TOH because the lease had been terminated as to two prior tenants, and thus, Circle K had no obligation to pay rent and costs accrued after the current tenant took occupancy. We disagree.

Circle K relies on Savannah Yacht Corp. v. Thunderbolt Marine, Inc.,9 for the following proposition:

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734 S.E.2d 752, 318 Ga. App. 753, 2012 Fulton County D. Rep. 3843, 2012 Ga. App. LEXIS 989, Counsel Stack Legal Research, https://law.counselstack.com/opinion/circle-k-stores-inc-v-t-o-h-associates-ltd-gactapp-2012.