Wright v. IC Enterprises, Inc.
330 Ga. App. 303
Ga. Ct. App.2014Background
- Landlord Wright (individually and as trustee) leased two commercial properties in Doraville to IC Enterprises, Inc. (ICE) / II C. Park through a series of leases, assignments, and amendments (original large-property lease dated May 1, 1999; smaller-property lease dates in 2005 and assignment Jan. 12, 2007).
- In April 2008 the parties executed a “3rd Lease Amendment” for the 14,700 sq. ft. warehouse (large property) that increased rent, extended the term, reconfirmed prior lease terms, and attempted to incorporate an earlier lease but mistakenly referenced the date "January 12, 2007."
- County required a sprinkler or fire-detection system for a certificate of occupancy; Wright’s property manager communicated that Wright would pay for a sprinkler "if the county forces the issue," but ICE indicated it planned to vacate instead.
- ICE vacated both properties effective January 31, 2010; Wright sued for unpaid rent, utilities, CAM fees, repair costs, and attorney fees; ICE counterclaimed seeking return of security deposits and denied enforceability of the lease(s).
- Trial court granted summary judgment to ICE/Park, holding the 3rd Lease Amendment was unenforceable (too indefinite), ICE was a tenant-at-will entitled to 60 days’ notice, ICE owed no CAM/utilities/attorney fees, Wright breached a post-lease promise re: sprinkler, and Wright must return security deposits.
- Court of Appeals reversed: it held the 3rd Lease Amendment was enforceable (typographical date error did not void the amendment), ICE remained liable for CAM/utilities/attorney fees, the existence of a mutual departure re: sprinkler presented factual issues for trial, and Wright could retain deposits to cover unpaid rent/damages pending factual determination.
Issues
| Issue | Wright 27s Argument | ICE/Park 27s Argument | Held |
|---|---|---|---|
| Enforceability of the 3rd Lease Amendment for the large property | The amendment is a valid, enforceable lease amendment that incorporated the original 1999 lease; the Jan. 12, 2007 date is a clerical error | The amendment is void / too indefinite because it incorpoates a lease by the wrong date and wrong parties | Reversed trial court: amendment is enforceable; the Jan. 12, 2007 date is a patent ambiguity resolvable by parol evidence and does not void the amendment |
| Liability for CAM fees, utilities, and attorney fees (both properties) | Original leases (and amendments) impose CAM, utilities, and attorney-fee obligations on tenant; those provisions remain in force | No enforceable lease terms, so ICE not liable | Reversed trial court: ICE is liable for CAM, utilities, and attorney fees because the amendment(s) reconfirmed original lease obligations |
| Alleged post-lease promise to install sprinkler (Wright breached) | No binding departure from lease terms; original lease placed responsibility for compliance and many nonstructural upgrades on tenant | Warden 27s communications created a mutual departure / quasi-new agreement obligating landlord to install sprinkler | Reversed trial court: whether parties created a mutual departure is a factual question for the trier of fact, not decidable on summary judgment |
| Right to retain security deposit / damages for property condition | Wright may retain deposit to cover unpaid rent and compensable damages; evidence of damage exists via property manager testimony | Trial court found insufficient proof of pre- and post-tenancy condition and costs; ordered return of deposits | Reversed trial court: genuine factual disputes exist about damage and rent for interim vacancy; Wright may be entitled to retain deposits pending proof at trial |
Key Cases Cited
- Vick v. Tower Place, 268 Ga. App. 108 (Ga. Ct. App.) (summary-judgment de novo review)
- Eckerd Corp. v. Alterman Properties, 264 Ga. App. 72 (Ga. Ct. App.) (opposing party gets benefit of reasonable doubt on summary judgment)
- Burns v. Dees, 252 Ga. App. 598 (Ga. Ct. App.) (indefiniteness can render contract void)
- Kitchen v. Insur-america Corp., 296 Ga. App. 739 (Ga. Ct. App.) (law disfavors destruction of contracts for uncertainty)
- Estate of Ryan v. Shuman, 288 Ga. App. 868 (Ga. Ct. App.) (elements required for valid lease)
- Nacoochee Corp. v. Suwanee Investment Partners, 275 Ga. App. 444 (Ga. Ct. App.) (insufficient lease identification can invalidate agreement)
- Fab 27rik Boutique v. Shops Around Lenox, 329 Ga. App. 21 (Ga. Ct. App.) (clarifying use of parol evidence to resolve patent ambiguities)
- Zakaria v. McElwaney, 174 Ga. App. 149 (Ga. Ct. App.) (clerical mistakes that do not change parties 27 intent should not defeat contract)
- Circle K Stores v. T. O. H. Assocs., 318 Ga. App. 753 (Ga. Ct. App.) (mutual departure/quasi-new agreement and waiver generally are jury questions)
- Meek v. Mallory & Evans, 318 Ga. App. 407 (Ga. Ct. App.) (landlord may retain deposit to cover unpaid rent)
- Abernethy v. Cates, 182 Ga. App. 456 (Ga. Ct. App.) (tenant 27s breach and condition-of-premises issues are for the jury)