Southeast Diamond Jubilee Investments, LLC, as Successor To Kawal, Inc., D/B/A Gas Express v. UMA Shiv, Inc.
E2019-02141-COA-R3-CV
Tenn. Ct. App.Nov 30, 2020Background
- 2013 commercial lease: Kawal, Inc. (Gas Express) leased a gas station/convenience store to Uma Shiv, Inc. for five years with renewal options; tenant operated pumps and market downstairs; upstairs had separate units.
- In 2017 the Poonawallas bought the Property and conveyed it to Southeast Diamond Jubilee Investments, LLC (Southeast Diamond), which sought a revised lease; the parties did not agree and the 2013 Lease remained in effect.
- Southeast Diamond sued in general sessions (unlawful detainer) alleging breaches (TDEC and City code violations, unpaid rent/water, denied access, repairs not made, etc.); general sessions dismissed with prejudice; case appealed to circuit court where Southeast Diamond filed an amended complaint reiterating multiple alleged breaches and sought eviction, damages, and fees.
- After a four-day bench trial the circuit court found most alleged violations either were not the tenant’s contractual responsibility, were minor, or had been cured; the court found the tenant credible, the owners less so, and dismissed Southeast Diamond’s complaint for failure to prove a material breach.
- On appeal, this Court affirmed: tenant had paid rent and exercised renewal, TDEC/City violations were addressed (some were owner responsibility or cured), only minor breaches existed (some City-code items and late water payments) and those were cured; attorney-fee claim waived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Uma Shiv materially breached the Lease by multiple acts (TDEC violations, City-code violations, repair failures, denied access, water issues, etc.) | Southeast Diamond: tenant committed at least ten material breaches (including TDEC and code noncompliance) justifying termination and eviction. | Uma Shiv: lease language is silent as to tank/pump maintenance; prior landlord had accepted responsibility; tenant paid rent, cured issues, and TDEC/City ultimately found compliance. | Court: No material breach. Only minor breaches (some City-code items, delayed water payments) found and they were cured. Dismissal affirmed. |
| Whether Southeast Diamond provided required written notice and opportunity to cure under Paragraph 13 | Southeast Diamond: contests trial-court finding that it failed to give required written notice; argues paragraph 13 governs notice. | Uma Shiv: trial court found notice absent and any breaches were cured; remedy unnecessary. | Court: Because no material breach, the notice/ cure question is moot. |
| Whether repeated TDEC violations (and tenant’s stance on responsibility) created a risk justifying eviction | Southeast Diamond: TDEC violations posed serious risk and tenant refused responsibility for tanks/reports; this supports termination. | Uma Shiv: lease does not clearly assign tank/pump responsibility to tenant; some violations were owner-only; TDEC issues were largely paperwork, many were cured, and tenant completed training. | Court: Lease unambiguous on its face that it did not assign full tank/pump responsibility to tenant; TDEC violations were addressed; no material breach or equitable basis for forfeiture. |
| Entitlement to attorney’s fees under Lease Paragraph 13 | Southeast Diamond: requests fees under paragraph 13 if it prevails. | Uma Shiv: opposing party argued waiver/other defenses. | Court: Fee request was not raised as an appellate issue in the statement of issues and is therefore waived. |
Key Cases Cited
- Planters Gin Co. v. Fed. Compress & Warehouse Co., Inc., 78 S.W.3d 885 (Tenn. 2002) (plain‑meaning rule and initial ambiguity analysis for contract interpretation)
- Kafozi v. Windward Cove, LLC, 184 S.W.3d 693 (Tenn. Ct. App. 2005) (contract ambiguity and intent analysis)
- M & M Elec. Contractor, Inc. v. Cumberland Elec. Membership Corp., 529 S.W.3d 413 (Tenn. Ct. App. 2016) (material vs. minor breach—nonmaterial breach does not excuse performance)
- Cooper v. Patel, 578 S.W.3d 40 (Tenn. Ct. App. 2018) (Restatement factors for determining whether a breach is material)
- Morrison v. Allen, 338 S.W.3d 417 (Tenn. 2011) (trial-court credibility findings entitled to great deference on appeal)
- Hughes v. Donlon, 261 S.W. 960 (Tenn. 1924) (tenant’s leasehold survives sale of the leased premises)