Marvin Hewatt Enterprises, Inc. v. Butler Capital Corporation
328 Ga. App. 317
Ga. Ct. App.2014Background
- Lender holds a security interest in the store assets; landlord owns the commercial property and leased to the tenant, Hamilton Mill Food & Gas, Inc.
- In 1999–2007 the tenant assumed the lease; 2007 loan from lender to tenant secured by store assets; landlord agreement governs post-termination rights.
- April 2011: tenant sought to surrender; landlord facilitated transfer to a successor tenant and arranged asset transfer without tenant liability for deficiencies.
- July 2011: tenant defaults on loan; lender learns store operations have ceased and begins suit seeking damages and enforcement of rights.
- October 2011: landlord makes a belated, conditional offer to have lender assume the lease; by then a third party had taken over the business.
- Court addresses breach of contract, conversion, unjust enrichment, and discovery/affidavit-related issues, ruling on each claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a termination of the lease? | Butler Capital argues surrender/termination occurred via landlord actions. | Hewatt contends no termination; lease continued or no valid termination. | Question of termination properly for jury; not entitled to summary judgment. |
| Did landlord's actions constitute conversion of secured assets? | Lender asserts landlord exercised dominion over assets or conspired to dispose of them. | Landlord did not personally purchase or sell assets; actions by tenant/successor were not landlord's direct conversion. | Conversion denial as to landlord's direct action; however, conspiracy theory sufficiently supported to survive summary judgment. |
| Is unjust enrichment available where there is an express contract? | Lender seeks unjust enrichment remedy alongside contract claims. | Existence of an express contract bars unjust enrichment. | Unjust enrichment claim barred; contract exists, so cannot recover under unjust enrichment. |
| Were discovery sanctions and affidavit-strike issues properly decided? | Lender sought sanctions for false discovery responses and affidavit inconsistencies. | Landlord contends trial court acted within discretion. | No abuse of discretion; sanctions and affidavit ruling affirmed. |
Key Cases Cited
- Circle K Stores v. T. O. H. Assocs., 318 Ga. App. 753 (2012) (mutual deed to terminate required for surrender by operation of law)
- Savannah Yacht Corp. v. Thunderbolt Marine, 297 Ga. App. 104 (2009) (surrender by operation of law can terminate a lease)
- Meek v. Mallory & Evans, Inc., 318 Ga. App. 407 (2012) (landlord may terminate for nonpayment or defaults per lease terms)
- Lawson v. Crawford, 220 Ga. App. 447 (1996) (landlord may relet while holding original tenant liable for deficiency)
- All Business Corp. v. Choi, 280 Ga. App. 618 (2006) (elements of conversion include disposition and lack of authorization)
- McIntee v. Deramus, 313 Ga. App. 653 (2012) (civil conspiracy framework for liability for acts in furtherance of unlawful design)
- Parrish v. Jackson W. Jones, P. C., 278 Ga. App. 645 (2006) (conspiracy requires mutual understanding to accomplish tortious goal)
- Bedsole v. Action Outdoor Advertising JV, 325 Ga. App. 194 (2013) (unjust enrichment requires absence of contract)
- Tuvim v. United Jewish Communities, 285 Ga. 632 (2009) (unjust enrichment when no contract exists)
- Ades v. Werther, 256 Ga. App. 8 (2002) (contract negates unjust enrichment damages)
- Han v. Han, 295 Ga. App. 1 (2008) (no recovery under unjust enrichment where express contract exists)
- Vickers v. Chrysler Credit Corp., 158 Ga. App. 434 (1981) (trial court may consider admissible portions of affidavits on summary judgment)
- Ford Motor Co. v. Conley, 294 Ga. 530 (2014) (trial court supervises discovery and credibility of witnesses)
- Citifinancial Svcs. v. Varner, 320 Ga. App. 170 (2013) (summary-judgment standard and de novo review)