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3455 LLC v. ND Properties, Inc.

United States District Court, N.D. Georgia, Atlanta Division

August 5, 2014

3455 LLC, Plaintiff,
v.
ND PROPERTIES, INC., Defendant.

OPINION AND ORDER

WILLIAM S. DUFFEY, Jr., District Judge.

This matter is before the Court on Defendant ND Properties, Inc.'s ("ND Properties") Motion for Summary Judgment [32], in which ND Properties seeks summary judgment on Counts II-IV[1] of Plaintiff's Complaint, and on the claims in ND Properties' Counterclaim.

I. BACKGROUND

A. Facts

This action involves the interpretation of a lease of real property for the operation of the former Bluepointe restaurant in the Buckhead neighborhood of Atlanta. On June 11, 1998, Plaintiff 3455, LLC ("Plaintiff") entered into a fifteen (15)-year lease agreement ("Lease") with Cousins Loret Venture, LLC ("Cousins") to lease approximately 9, 885 square feet ("Premises" or, as used in the Lease, the "Demised Premises") on the ground floor and concourse level of the Pinnacle building. The building is owned by Cousins, and located at 3455 Peachtree Road, N.E. in Atlanta. The Lease, by its terms, provides for an expiration date of October 31, 2014. The Premises that are the subject of the Lease are depicted on Exhibit B, attached to the Lease. See Lease at 4, Ex. B. Plaintiff owned and operated an Asian Fusion restaurant called Bluepointe on the Premises. In 2004, Cousins sold the office building and assigned its rights and obligations under the

Lease to ND Properties, which became the landlord under the Lease. In 2008, sales at the Bluepointe restaurant declined significantly due to a number of factors, including the recessionary effect on the national and regional economies, and, according to Plaintiff, the departure of various building tenants which generated income for the restaurant. As a result of this decrease in restaurant patronage and the resulting losses of income, Plaintiff was unable to make certain rent payments, including the rent payment due on July 1, 2011. This failure to pay rent constituted a default under the Lease.

After default for failure to pay, ND Properties initiated actions against Plaintiff to dispossess Plaintiff from the Premises. These dispossessory actions resulted in the entry of a Consent Agreement in which Plaintiff agreed that "as a result of [Plaintiff's] default, [ND Properties] was entitled to the issuance of a writ of possession." Consent Agreement at ¶ 1. ND Properties agreed not to cause the Fulton County Sheriff's Office to formally evict Plaintiff from the Premises provided Plaintiff met a variety of forbearance conditions. These included:

1. Plaintiff would pay by August 30, 2011, the sum of $130, 611, which consisted of the lease rent charges, parking charges, and estimated utility charges for September, October, and November 2011.[2]
2. A money judgment in the amount of $148, 967.45 be entered against Plaintiff, which would be paid by August 30, 2011.
3. Plaintiff would not remove personal property from the premises.
4. Plaintiff would continue to perform all of its obligations under the Lease.
5. Plaintiff's right to possess the Premises would terminate on November 30, 2011, and on that date Plaintiff would vacate the Premises.
6. Plaintiff's vacation of the Premises would not constitute a surrender of the Lease.

Consent Agreement at 1-2.

On November 30, 2011, Plaintiff vacated the Premises, leaving behind certain personal property, including furniture, fixtures and equipment ("Equipment"). Plaintiff has not made any rent payments to ND Properties, and has not reimbursed ND Properties for utility and parking charges incurred during Plaintiff's tenancy after Plaintiff vacated the Premises on November 30, 2011.

In December 2012, ND Properties entered into a lease agreement with a new tenant to occupy the Premises, and with an expected occupancy date in November or December of 2013. ND Properties claims that it spent $2, 228, 843 to re-let the Premises to another restaurant owner.

B. Procedural History

On January 9, 2012, Plaintiff initiated this action in the Superior Court of Gwinnett County, Georgia. In its Complaint, Plaintiff asserts four (4) counts seeking: (i) a declaration that Plaintiff is not liable for rent payments after Plaintiff vacated the Premises because the Lease does not contain "an explicit and detailed provision" that obligates Plaintiff to continue paying rent (Count I); (ii) a declaration that ND Properties improperly retained possession of Plaintiff's property (Count II); (iii) a declaration that ND Properties' actions in granting a right-of-way over to a third-party constituted termination of the Lease (Count III); and a declaration that Plaintiff is not obligated to clean and repair the Premises, or that such cleaning is not necessary (Count IV).

On March 26, 2012, ND Properties removed the action to this Court on the basis of diversity jurisdiction. On April 2, ND Properties filed its Answer. On June 18, 2012, ND Properties filed a Motion for Judgment on the Pleadings seeking judgment in its favor on Count I of Plaintiff's Complaint. On February 12, 2013, the Court granted the Motion, dismissing Count I of the Complaint [11]. In its February 12, 2013, Order, the Court found that the Lease contained an "explicit and detailed provision" that permitted ND Properties, upon Plaintiff's default, to take possession of the Premises, without terminating the Lease, and without relieving Plaintiff of its obligation to continue making rent and other payments required by the Lease.

On May 14, 2013, ND Properties filed an Amended Answer to Plaintiff's Complaint, and asserted a Counterclaim for Plaintiff's breach of the Lease agreement in an amount of $457, 135.13, consisting of (i) past due rent from December, 2011 through May, 2013, in the amount of $376, 074.49, (ii) accrued interest in the amount of $16, 102.49, (iii) unpaid parking charges and fees in the amount of $15, 987.74, (iv) cleaning expenses and other above-standard charges in the amount of $28, 501.15, and (v) unreimbursed water and electricity charges in the amount of $20, 469.28. ND Properties also seeks to collect rent and late charges that continue to accrue under the Lease.

ND Properties contends that rent accrues during the Lease term at the rate of $22, 000 per month due on the first calendar day of each month through either (i) October 31, 2014, or (ii) the date a final judgment is entered by the Court, whichever is earlier. ND Properties also seeks to collect late fees, at the rate of 5.25% per annum, for rent that accrued but which was not timely paid. ND Properties further seeks attorneys' fees and expenses of this litigation pursuant to Paragraph 18 of the Lease or O.C.G.A. § 13-1-11 and O.C.G.A. § 13-6-11, and pre-judgment and post-judgment interest.

On December 9, 2013, ND Properties moved for summary judgment on Counts II-IV of Plaintiff's Complaint. ND Properties also moved for summary judgment on its Counterclaim for past due rent, interest and other charges owed under the Lease. ND Properties seeks a judgment against Plaintiff in the principal amount of $755, 048.84, for unpaid rent and other charges, plus pre- and post-judgment interest, and attorneys' fees in the amount of $77, 303.83 pursuant to Paragraph 18.2.3 of the Lease and O.C.G.A. § 13-1-11.

II. DISCUSSION

A. Legal Standard

A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Parties "asserting that a fact cannot be or is genuinely disputed must support that assertion by... citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." Fed.R.Civ.P. 56(c)(1).

The party seeking summary judgment bears the burden of demonstrating the absence of a genuine dispute as to any material fact. Herzog v. Castle Rock Entm't , 193 F.3d 1241, 1246 (11th Cir. 1999). Once the moving party has met this burden, the non-movant must demonstrate that summary judgment is inappropriate by designating specific facts showing a genuine issue for trial. Graham v. State Farm Mut. Ins. Co. , 193 F.3d 1274, 1282 (11th Cir. 1999). Non-moving parties "need not ...


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