One South, Inc. v. George F. Hollowell, Jr.

CourtMississippi Supreme Court
DecidedApril 18, 2006
Docket2006-CA-01048-SCT
StatusPublished

This text of One South, Inc. v. George F. Hollowell, Jr. (One South, Inc. v. George F. Hollowell, Jr.) 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
One South, Inc. v. George F. Hollowell, Jr., (Mich. 2006).

Opinion

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2006-CA-01048-SCT

ONE SOUTH, INC.

v.

GEORGE F. HOLLOWELL, JR., JUNE H. WEATHERS AND WILLIAMS S. WEATHERS

DATE OF JUDGMENT: 04/18/2006 TRIAL JUDGE: HON. RICHARD A. SMITH COURT FROM WHICH APPEALED: WASHINGTON COUNTY CIRCUIT COURT ATTORNEY FOR APPELLANT: HAROLD H. MITCHELL, JR. ATTORNEY FOR APPELLEES: JEFFREY A. LEVINGSTON NATURE OF THE CASE: CIVIL - CONTRACT DISPOSITION: THE WASHINGTON COUNTY CIRCUIT COURT’S GRANT OF PARTIAL SUMMARY JUDGMENT IN FAVOR OF THE GUARANTORS, GEORGE F. HOLLOWELL, JR., JUNE H. WEATHERS, AND WILLIAM S. WEATHERS, AND AGAINST ONE SOUTH, INC., IS AFFIRMED; THE WASHINGTON COUNTY CIRCUIT COURT’S DENIAL OF ONE SOUTH, INC.’S M OTION FOR SUMMARY JUDGMENT IS AFFIRMED IN PART AND REVERSED IN PART AND REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION - 09/06/2007 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE DIAZ, P.J., CARLSON AND RANDOLPH, JJ.

CARLSON, JUSTICE, FOR THE COURT:

¶1. One South, Inc., instituted an action against the guarantors on a lease agreement for

the lease of certain nonresidential real property. After the lessee, Hollowell Mercantile Company, Inc., missed two rental payments and filed for bankruptcy, One South regained

possession of the property, but sought to have the lease agreement accelerated, with the

guarantors to pay out the remaining portion of the lease agreement plus reasonable attorney

fees. Under the assumption that One South had terminated the lease agreement by retaking

possession of the property, the guarantors filed for partial summary judgment, asserting that

since Hollowell Mercantile’s obligations ceased under the lease agreement, the guarantors’

obligations likewise ceased. After the trial court granted the guarantors’ motion for partial

summary judgment and, in essence, denied One South’s motion for summary judgment, One

South appealed to us. While we affirm the trial court’s grant of the guarantors’ motion for

partial summary judgment, we find error in the trial court’s denial, in toto, of One South’s

motion for summary judgment. Therefore, we affirm in part and reverse in part, remanding

this case to the Washington County Circuit Court for an evidentiary hearing on the issue of

the amount of reasonable attorney’s fees to be awarded to One South.

FACTS AND PROCEEDINGS IN THE TRIAL COURT

¶2. On October 15, 2001, Hollowell Mercantile, Inc., entered into a five-year lease for

certain nonresidential real property with One South, Inc., the drafter of the lease. Under the

terms of the lease, it was to expire on September 15, 2006. As President of Hollowell

Mercantile, William S. Weathers signed the lease on behalf of Hollowell Mercantile. On the

same day, the Appellees, George F. Hollowell, Jr., June H. Weathers, and William S.

Weathers (“guarantors”), as shareholders of Hollowell Mercantile, signed a separate guaranty

2 agreement stating that they “jointly and severally, personally” guaranteed the obligations of

Hollowell Mercantile under the lease agreement.

¶3. Thereafter, Hollowell Mercantile made monthly rental payments of $4,000 through

February 2004. In March 2004, Hollowell Mercantile failed to make its monthly rental

payment. On May 1, 2004, Hollowell Mercantile filed for bankruptcy under Chapter 11 in

the United States Bankruptcy Court for the Northern District of Mississippi. During the

bankruptcy proceedings, One South was awarded $8,000 in administrative expenses for the

period of May 1, 2004, through June 30, 2004. Because Hollowell Mercantile failed to

assume or reject the lease agreement during the sixty days following the bankruptcy court’s

Order for Relief, the lease was deemed rejected pursuant to 11 U.S.C. § 365(d)(4).1 On

August 23, 2004, One South filed a Motion to Lift Stay and Abandon Property, and on

September 23, 2004, the bankruptcy judge entered an order lifting the automatic stay and

allowing One South to regain possession of the property.

¶4. On February 1, 2005, One South filed suit against the guarantors in the Circuit Court

of Washington County, seeking payment for two and one-half years of rental payments still

remaining under the terms of the lease agreement as well as reasonable attorney’s fees. On

1 11 U.S.C. § 365(d)(4) reads: If the trustee does not assume or reject an unexpired lease of nonresidential real property under which the debtor is the lessee within 60 days after the date of the order for relief, or within such additional time as the court, for cause, within such 60-day period, fixes, then such lease is deemed rejected, and the trustee shall immediately surrender such nonresidential real property to the lessor.

3 February 8, 2006, One South filed a motion for summary judgment. Thereafter, on March

30, 2006, Hollowell Mercantile filed a motion for partial summary judgment, claiming that

One South terminated the lease according to the provisions set out in Section 13.01 of the

lease when it took possession of the property. Thus, the guarantors assert if they are liable

at all, they are liable to One South only for the rental payments until September of 2004,

minus the $8,000 already obtained by One South in the bankruptcy proceedings, for a total

of $20,000.

¶5. On April 19, 2006, the Washington County Circuit Court entered an order granting

the guarantors’ motion for partial summary judgment and finding that the lease has

terminated on September 23, 2004. As such, the circuit court declared that the guarantors

had no further obligations to One South after September 23, 2004. Additionally, the circuit

court disallowed the payment of reasonable attorney’s fees by the guarantors because there

was no express provision in the guaranty agreement requiring the payment of reasonable

attorney’s fees. Based on the circuit court’s order, One South filed a Motion to Alter or

Amend, or in the Alternative, For Relief From Judgment,2 which the trial court denied on

2 On April 19, 2006, the trial court entered an order entitled “Order Granting Defendants’ Motion for Partial Summary Judgment.” Although the trial judge acknowledged in this order that there had been a hearing on the “Plaintiff’s and Defendants’ Motions for Summary Judgment,” the trial court, in this order, ruled only on the Defendants’ motion for partial summary judgment. This omission would later cause One South to assert that the trial court had “remained silent as to One South’s Motion for Summary Judgment, a silence that can only be interpreted within the context of the language of the final Order from the trial court to mean that One South’s motion was denied.” We agree with One South’s interpretation of the trial court’s failure to rule on One South’s motion for summary judgment.

4 June 3, 2006. Thereafter, on June 12, 2006, One South filed its Notice of Appeal to this

Court assigning four assignments of error: (1) Whether the trial court erred in finding the

lease had terminated; (2) whether the trial court erred in not finding that Hollowell

Mercantile continued to be in default of the lease; (3) whether the trial court erred in failing

to hold the guarantors liable for the obligations of Hollowell Mercantile under the lease; and

(4) whether the trial court erred in the amount of damages it awarded One South. We have

combined and restated the issues for clarity in discussion.

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