3455, LLC v. ND Properties, Inc.
631 F. App'x 701
11th Cir.2015Background
- 3455, LLC leased restaurant space under a 1998 lease (amended through Oct. 31, 2014). ND Properties acquired the building and became landlord.
- After business declined and lease defaults, 3455 and ND Properties executed a Consent Agreement (2011) requiring 3455 to pay certain sums, vacate by Nov. 30, 2011, leave personal property behind, and perform lease obligations; the Consent Agreement stated landlord’s taking possession would not constitute acceptance of surrender.
- GDOT performed nearby construction and obtained a right-of-way; 3455 alleged the partial taking affected use and argued it terminated the lease.
- ND Properties sought unpaid rent, parking, utilities, re-letting costs, and attorney’s fees after 3455 vacated; 3455 sued for declaratory relief on post-vacatur rent, disposition of personal property, lease termination by taking, and cleaning/repair obligations.
- District court granted judgment on the pleadings that lease permitted post-eviction rent and later granted summary judgment to ND Properties on remaining issues, awarding damages (about $755,048.84) and later $39,606.84 in attorney’s fees; 3455 appealed but did not challenge the attorney-fees award on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lease permits landlord to collect rent after dispossession | 3455: Post-eviction rent provision is invalid/public policy; lease lacks mitigation requirement | ND: Lease expressly preserves tenant liability for rent after landlord takes possession; consent agreement reaffirmed lease obligations | Court: Lease unambiguous; parties contracted for post-eviction rent; enforceable under GA law |
| Whether landlord accepted surrender (thereby terminating lease) | 3455: Landlord’s conduct (taking possession, enforcing broom-clean term) amounted to acceptance of surrender | ND: Consent Agreement expressly provided that taking possession was not acceptance of surrender | Court: Consent Agreement controls; no acceptance of surrender; lease continued |
| Proper treatment of personal property left on premises | 3455: ¶58 security-interest procedures / UCC auction required; landlord must sell and credit proceeds | ND: Consent Agreement and ¶30 (abandonment on dispossession) applied, permitting landlord to appropriate/dispose without accounting | Court: ¶30 (specific to dispossession) governs; 3455 agreed to leave property and it was deemed abandoned; summary judgment for ND |
| Sufficiency of evidence for monetary award (declarations, interest, re-letting costs) | 3455: Beauchamp declarations contain hearsay, lack foundation, no business-record support | ND: Declarations from property manager supplied personal-knowledge calculations and interest basis | Court: 3455 largely failed to preserve hearsay complaint on these items; declarations provided adequate foundation; damages upheld |
Key Cases Cited
- Perez v. Wells Fargo, 774 F.3d 1329 (11th Cir. 2014) (standard for judgment on the pleadings)
- Ellis v. England, 432 F.3d 1321 (11th Cir. 2005) (summary judgment standard and view of evidence)
- Royalty Network, Inc. v. Harris, 756 F.3d 1351 (11th Cir. 2014) (choice-of-law: apply forum state substantive law)
- City of Baldwin v. Woodard & Curran, Inc., 293 Ga. 19 (Ga. 2013) (Georgia three-step contract-construction framework)
- Int’l Biochemical Indus., Inc. v. Jamestown Mgmt. Corp., 262 Ga. App. 770 (Ga. Ct. App. 2003) (parties may contract to hold tenant liable for post-eviction rent)
- Nobles v. Jiffy Mkt. Food Store Corp., 260 Ga. App. 18 (Ga. Ct. App. 2003) (on acceleration clauses and unconscionability issues)
- Allen v. Harkness Stone Co., 271 Ga. App. 397 (Ga. Ct. App. 2005) (landlord’s duty to mitigate upon acceptance of surrender)