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Tela Investments, LLC v. Razavi

Court of Appeals of Georgia, Fifth Division

June 28, 2019

TELA INVESTMENTS, LLC
v.
RAZAVI; and vice versa.

          MCFADDEN, P. J., MCMILLIAN and GOSS, JJ.

          McFADDEN, PRESIDING JUDGE.

         This case involves a residential lease agreement with an option to purchase between Tela Investments, LLC and Ehsan Razavi. The trial court granted Razavi's motion for summary judgment as to Tela's dispossessory action and claim for attorney fees under a lease provision, denied summary judgment to Tela as to Razavi's breach of contract and other counterclaims, and ordered Razavi to pay the option purchase price into the registry of the court. Because there are no genuine issues of material fact as to Tela's claims, but there are genuine issues of material fact as to Razavi's counterclaims, we affirm the trial court's summary judgment rulings. And because ordering the payment of the option purchase price into the court registry defeats the parties' intent, we reverse that portion of the order.

         1. Facts and procedural posture.

         "Summary judgment is warranted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. On appeal from the grant or denial of summary judgment, we conduct a de novo review, with all reasonable inferences construed in the light most favorable to the nonmoving party." Parke Town North Apartments v. Castro, Ga.App. (1) (824 S.E.2d 730) (2019) (citation and punctuation omitted).

         So construed, the evidence shows that in March 2009, Tela and Razavi entered into a residential lease agreement with an option for Razavi to purchase the house. The agreement provided that Razavi would pay a base monthly rental amount of $799, plus an additional rental amount based upon property taxes and hazard insurance. The residential lease agreement was amended in November 2014 to provide, among other things, that Razavi could exercise the option to purchase the property for $138, 000 at any time prior to the expiration of the lease on May 30, 2017.

         On October 21, 2016, counsel for Tela notified counsel for Razavi that the lease agreement was terminated because Razavi had failed to make required payments totaling $2, 919. On November 1, 2016, Razavi delivered two checks to Tela's attorney, one check for the claimed arrearage of $2, 919 and another for the November rent of $799. On November 30, 2016, Tela filed and served an affidavit for a dispossessory warrant, claiming that Razavi was still in possession of the house following Tela's termination of the lease. Razavi answered and counterclaimed for, among other things, breach of contract, specific performance, and fraud.

         On January 11, 2018, Razavi filed a motion for summary judgment as to Tela's dispossessory action and claim for attorney fees, and Tela subsequently filed a motion for summary judgment as to Razavi's counterclaims. After a hearing, the trial court granted Razavi's motion, denied Tela's motion, and ordered Razavi to pay the full option purchase price of $138, 000 into the court registry. Tela appeals in Case No. A19A0200, challenging the trial court's summary judgment rulings; and Razavi cross-appeals in Case No. A19A0201, challenging the trial court's order that he deposit the option purchase price into the registry of the court.

         Case No. A19A0200

         2. Dispossessory action.

         Tela contends that the trial court erred in granting summary judgment to Razavi on its dispossessory action. We disagree.

Where a lessee has breached a lease, the lessor is authorized to rescind the lease and summarily dispossess the lessee as a tenant holding over. . . . When a tenant fails to discharge his obligations under the lease, the landlord has the right, created by the lease itself, to terminate the lease. Once the landlord terminates the lease and the tenant refuses to vacate, the tenant becomes a tenant holding over beyond the term of the lease. The landlord has the right, at that point, to institute dispossessory proceedings . . . by making demand for possession.

C & A Land Co. v. Rudolf Inv. Corp., 163 Ga.App. 832, 833 (296 S.E.2d 149) (1982) (citations omitted). Thus, the evidence in the instant case, construed in Tela's favor, supports Tela's right to seek to terminate the lease due to Razavi's alleged failure to make payments as required by the lease.

However, if the lessor wishes to declare a forfeiture of the lease for nonpayment it is incumbent upon the lessor to return immediately upon receipt thereof any and all payments of rental received by the lessor after the happening of the event giving the landlord the right to declare the forfeiture. . . . Acceptance and retention of rentals by the lessor after the alleged breach or forfeiture constitutes a waiver and reinstates the lease. The fact that the lessor does not cash the check is immaterial. Assertions of forfeiture for nonpayment and retention of rentals are totally incompatible, and the lessor must take the effect of that which is most favorable to the tenant. In cases of doubt, in contests between landlords and tenants, the issue will be resolved in favor of the tenant.

Id. at 833-834 (citations and punctuation omitted).

         Here, Tela accepted and retained Razavi's checks for the claimed arrearage after purportedly terminating the lease. So the trial court correctly found that Razavi was entitled to summary judgment on this basis. We note that Tela has ignored this basis for the trial court's ruling and has pointed to no evidence creating a genuine issue of material fact, instead focusing its argument on its attempt to terminate the lease based on the alleged default. See Cowart v. Widener, 287 Ga. 622, 623 (1) (a) (697 S.E.2d 779) (2010) (nonmoving party cannot rest on its pleadings, but must point to specific evidence giving rise to a triable issue). As this court has held in affirming summary judgment to a defendant-tenant under similar circumstances, "[w]here the landlord accepts rent from the tenant after the default but before the dispossessory proceeding, the landlord then has no right to institute ...


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