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3455 LLC v. ND Properties, Inc.

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

October 10, 2014

3455 LLC, Plaintiff,


WILLIAM S. DUFFEY, Jr., District Judge.

This matter is before the Court on ND Properties, Inc.'s Motion for Attorneys' Fees [43].


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. In 2008, sales at Bluepointe 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. It was this default that brought about this litigation.

On November 30, 2011, Plaintiff vacated the Premises, leaving behind certain personal property, including furniture, fixtures and equipment ("Equipment"). Plaintiff had 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.

A. 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 (iv) 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 the 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 sought to collect rent and late charges that continued to accrue under the Lease after the Counterclaim was filed.

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[1], 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 $75, 572.38 pursuant to Paragraph 18.2.3 of the Lease and O.C.G.A. § 13-1-11.

In responding to ND Properties' Motion for Summary Judgment, Plaintiff did not oppose Defendant's request for attorneys' fees. Plaintiff did not assert any argument that, in the event Plaintiff was found in default of the Lease and liable for rent or other payments, that Defendant was not entitled to an award of attorneys' fees under the term of the Lease and pursuant to O.C.G.A. § 13-1-11. Plaintiff did not assert specifically that Plaintiff failed to meet any of the notice conditions required for an attorneys' fee award under Section 13-1-11.

On July 5, 2014, the Court entered its Opinion and Order granting ND Properties' Motion for Summary Judgment on ND Properties claims for unpaid rent, unpaid utilities and parking fees, unreimbursed re-letting costs, and unpaid interest (the "July 5th Order"). The Court found that "Paragraph 18.2.3 of the Lease, and O.C.G.A. § 13-1-11, permit ND Properties to recover reasonable attorneys' fees incurred to enforce the Lease" ([42 at 26]) but deferred a decision on the amount of attorneys' fees until ND Properties filed information supporting an attorneys' fee award. Id. at 27.

In its Motion for Attorney's Fees, ND Properties seeks an award of fees according to the formula contained in O.C.G.A. § 13-1-11.[2] The total attorneys' fee amount claimed is $75, 572.38. Defendant opposes the motion on the grounds, not raised before, (i) that Plaintiff did not comply with various conditions the Defendant claims are required before an award of attorneys' fees under Section 13-1-11 can be made because the formula in Section ...

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