Evans Plaza Partners, LLC v. Joy Webster, Chapter 7 Trustee
16-01035
Bankr. S.D. Ga.Mar 31, 2020Background
- Debtor Science Fitness filed Chapter 7; Trustee sold substantially all assets to Evans Fitness Club Express, LLC ("Express") by Sept. 27, 2016; Trustee never assumed the premises lease and it was rejected effective Oct. 1, 2016.
- With Landlord's consent Express had limited access Oct. 5–7, 2016 to remove purchased assets and paid prorated rent Oct. 1–7.
- Parties entered a storage agreement for disputed items pending litigation; a prior Liability Order held lockers and mirrors in the "New Addition" belonged to Landlord and the remaining mirrors to Express.
- Landlord (Evans Plaza Partners) contracted to lease the premises to Gold's Gym in Sept. 2016 and contends it could not deliver full possession to Gold's Oct.–Dec. 2016 because of Express's removal, damage, and on-site storage.
- Express claims 41 mirrors it purchased from the Trustee went missing while stored on-site and seeks replacement damages; evidence on per-mirror replacement cost varied widely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to holdover rent for Oct–Dec 2016 | Landlord: Express (as purchaser/transferee) prevented delivery to new tenant and is liable under lease holdover provision for double rent for three months | Express: Trustee rejected lease so no assignment occurred; Express left Oct. 7 per court orders; Landlord had control/access and consented to on-site storage | Court: Denied holdover rent—Trustee never assigned lease; Express not tenant; Landlord had possession/control; holdover formula in lease inapplicable |
| Damages for 41 missing mirrors | Landlord: (implicit) not liable; asserts ownership of some items | Express: Seeks monetary damages for 41 mirrors it purchased and that disappeared while stored on-site; replacement/installation cost disputed | Court: Awarded Express $2,870 (41 mirrors × $70 wholesale each)—installation costs not awarded because mirrors were purchased uninstalled |
Key Cases Cited
- Johnson v. Watkins, 107 S.E. 341 (Ga. Ct. App. 1921) (landlord resuming possession or exerting control can discharge tenant from future rent)
- In re Homeowner's Outlet Mall Exchange, Inc., 89 B.R. 965 (Bankr. S.D. Fla. 1988) (post-rejection rent limited to actual and necessary costs; trustee not liable for lease holdover formula)
- In re Rare Coin Galleries of Am., Inc., 72 B.R. 415 (D. Mass. 1987) (after lease rejection, debtor liable only for reasonable rental value, not contract rate)
- In re Aerospace Tech., Inc., 199 B.R. 331 (Bankr. M.D.N.C. 1996) (reasonable rental value is proper measure where creditor stored estate property)
