Circle K Stores, Inc. v. T. O. H. Associates, Ltd.
318 Ga. App. 753
Ga. Ct. App.2012Background
- TOH sued Circle K for rent under a lease and an assignment; trial court granted summary judgment to TOH; Circle K appeals on four propositions; lease began 1987 for 25 years; Circle K became guarantor through assignment; TOH alleged delinquent rent from 2009–2010 and later through 2011; disputes centered on partial payments, lease termination, rent amount, and mitigation of damages.
- Circle K argues partial payments created factual questions about waiving lease terms and ongoing liability; argues lease terminated for prior tenants and thus no post-occupancy rent; disputes amount of monthly rent due; contends TOH failed to mitigate damages.
- TOH argues no mutual waiver or modification occurred; no surrender of lease by operation of law proven; damages should be computed from the amended lease terms; TOH bears burden to prove damages with reasonable certainty; mitigation defenses depend on the guaranty provisions.
- Court affirmed liability finding, vacated damages ruling and remanded for damages/attorney fees determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver via partial payments created fact issue | TOH did not mutually depart from lease terms | TOH accepted partial payments to mitigate loss, implying modification | No mutual modification or waiver proven; TOH entitled to summary judgment on liability |
| Lease termination and post-occupancy rent | Terminations of prior tenants implied termination of Circle K's obligation | No evidence of surrender by operation of law or mutual agreement; leases reassigned | No genuine issue of termination; TOH liable for post-occupancy rent |
| Damages amount for rent due | Rent due per documents showing $12,144.75 monthly | Lease and First Amendment show $11,587 monthly; discrepancy unexplained | Issue of rent amount genuine; remand to determine proper damages and attorney fees |
| Mitigation of damages | Mitigation may be required under guaranty provisions | No duty to mitigate under lease/guaranty; burden on Circle K to prove failure to mitigate | No merit to mitigation claim; remand for consideration of damages if needed |
Key Cases Cited
- Savannah Yacht Corp., 141 Ga.App. 870, 234 S.E.2d 702 (1977) (Ga. App. 1977) (dispossession and surrender of lease by operation of law concepts)
- Gay v. Peake, 5 Ga.App. 583, 63 S.E.2d 650 (1909) (Ga. App. 1909) (landlord's resumption of possession can negate rent liability)
- Lau’s Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991) (Ga. 1991) (succinct discussion of contract modification and evidence requirements)
- Peterson v. Midas Realty Corp., 160 Ga.App. 333, 287 S.E.2d 61 (1981) (Ga. App. 1981) (presents principles on damages proof and contract terms)
- Post Realty Assoc. v. DSL Assoc., 228 Ga.App. 678, 492 S.E.2d 600 (1997) (Ga. App. 1997) (illustrates burden to show mitigation and damages context)