Lodgenet Entertainment Corp. v. Heritage Inn Associates

583 S.E.2d 225, 261 Ga. App. 557, 2003 Fulton County D. Rep. 1835, 2003 Ga. App. LEXIS 702
CourtCourt of Appeals of Georgia
DecidedJune 6, 2003
DocketA03A0398, A03A0399
StatusPublished
Cited by1 cases

This text of 583 S.E.2d 225 (Lodgenet Entertainment Corp. v. Heritage Inn Associates) 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
Lodgenet Entertainment Corp. v. Heritage Inn Associates, 583 S.E.2d 225, 261 Ga. App. 557, 2003 Fulton County D. Rep. 1835, 2003 Ga. App. LEXIS 702 (Ga. Ct. App. 2003).

Opinion

Mikell, Judge.

Lodgenet Entertainment Corporation (“Lodgenet”) contracted with Heritage Inn Associates, L.P. (“Heritage”) to provide television programming services to Heritage’s hotel in Orange County, Florida. Heritage terminated the agreement after transferring the property [558]*558to Orange County under threat of condemnation, and Lodgenet sued Heritage for breach of contract. Lodgenet and Heritage both moved for summary judgment. In Case No. A03A0398, Lodgenet appeals the trial court’s order granting Heritage’s motion for summary judgment and denying Lodgenet’s cross-motion for summary judgment. In Case No. A03A0399, Heritage appeals the trial court’s ruling that Heritage was not entitled to summary judgment under the contract’s “force majeure” provision. For the reasons set forth below, we affirm the trial court’s order in Case No. A03A0398. Heritage’s appeal in Case No. A03A0399 is moot.

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 a light most favorable to the party opposing the motion, warrant judgment as a matter of law.1 A defendant need not produce any evidence to obtain summary judgment, but must only point to an absence of evidence supporting at least one essential element of the plaintiff’s claim.2 Our review is de novo.3

The record shows that on May 25, 1999, the Orange County Board of County Commissioners (the “Board”) approved a resolution authorizing Orange County, Florida, to take the hotel by power of eminent domain. On May 27, 1999, the Board filed a petition in eminent domain in a Florida court. The Board and Heritage entered into a stipulated final judgment in the eminent domain proceedings. Under the terms of the stipulated final judgment, Orange County took title to the property and leased it back to Heritage until January 2, 2001. On November 30, 2000, Heritage notified Lodgenet that it was terminating their contract on January 1, 2001. Heritage ceased business operations at the hotel on January 1, 2001.

Case No. A03A0398

1. (a) Lodgenet claims that (i) the trial court erred in granting summary judgment to Heritage on the ground that Section 8.5 of the contract excused Heritage from further performance, and (ii) no other provision of the contract excused Heritage from further performance. We disagree because Section 8.5 of the contract unambiguously provides that either party may terminate the contract if either party discontinues business operations.

[559]*559“The construction of a contract is a question of law for the court.”4 Under the rules of contract construction,

[f]irst, if no ambiguity appears, the trial court enforces the contract according to its terms irrespective of all technical or arbitrary rules of construction. Thus, where the terms of the contract are clear and unambiguous, the court looks only to the contract to find the parties’ intent. Second, if the potential for ambiguity appears, the existence of non-existence of an ambiguity is itself a question of law for the court, unless an ambiguity remains even after the court has applied the pertinent rules of contract construction. OCGA § 13-2-2. Finally, issues of contract construction will be submitted to the jury only when there appears to be an ambiguity in the contract which cannot be resolved by the court’s application of the statutory rules of construction.5

Section 8.5 allows either party to terminate the agreement upon the occurrence of certain events, stating, in pertinent part: “whenever operations of business by either party are discontinued, by law or otherwise, for any reason whatsoever for a period of thirty (30) days or more, then either party may give notice of intention to terminate this Agreement.”6 Lodgenet argues that the purpose of Section 8.5 is to allow the termination of the contract in the event of bankruptcy or de facto insolvency. Lodgenet contends that the language in question appears in the middle of a very long paragraph replete with references to bankruptcy and insolvency, and should be interpreted [560]*560to mean a business discontinuation for any reason due to insolvency or bankruptcy. Lodgenet also argues that the disputed language, if interpreted literally and in isolation, would render the remainder of the section superfluous.7

We conclude that the disputed provision is clear and unambiguous. The contract allows termination after the cessation of business operations “for any reason whatsoever.” This is sweeping and inclusive language. Also, it is apparent that Lodgenet drafted the contract because it is on a pre-printed form which is copyrighted by Lodgenet. If the contract were ambiguous it would be construed against its drafter.8 Furthermore, the cessation of business clause does not make the remainder of the section superfluous because businesses can, in some circumstances, operate under bankruptcy. Based on the undisputed discontinuation of Heritage’s business, Section 8.5 of the contract authorized Heritage to terminate the contract “and the rights hereby granted.” Heritage did not breach the contract by doing so.

(b) Lodgenet shows that Heritage failed to dispute a letter from Lodgenet to Heritage’s general partner specifying a contract “buyout” amount pursuant to a default by Heritage. Lodgenet argues that it can be inferred from Heritage’s failure to dispute the letter that Heritage agreed that the contract was terminated because of a default by Heritage. We disagree. Heritage’s general partner was not shown to be under any duty to respond, and no inference was created.9

Lodgenet also argues that Heritage holds monies it received from Orange County under the settlement agreement in a constructive trust for Lodgenet. Because Lodgenet failed to argue it was entitled to a constructive trust in the court below, this issue has been waived.10

2. Lodgenet claims Heritage breached Séction 12.2 of the contract by failing to assign Heritage’s interest in the contract to the new owner of the hotel property, and that the trial court erred in denying Lodgenet’s motion for summary judgment because the contract was terminated pursuant to Heritage’s default under that section. Again, we disagree. .

Section 12.2 provides in pertinent part:

In the event that the party executing this Agreement on behalf of Hotel turns over management or ownership of the [561]*561Hotel Premises, as the case may be, to another party other than an Affiliate,11 such party shall assign this Agreement on behalf of Hotel to the party gaining management or control of the Hotel Premises, as the case may be.

Lodgenet contends that by selling the hotel premises to the County in the sale and lease back arrangement, that Heritage “turn fed] over management or ownership of the Hotel Premises” to the County, and that Heritage was accordingly obligated to assign the contract to the County, but did not do so.

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Bluebook (online)
583 S.E.2d 225, 261 Ga. App. 557, 2003 Fulton County D. Rep. 1835, 2003 Ga. App. LEXIS 702, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lodgenet-entertainment-corp-v-heritage-inn-associates-gactapp-2003.