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IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

May 7, 2002 Session

GALLATIN HOUSING AUTHORITY v. REBECCA & DIONISIO

MONTESILLO

 Appeal from the Circuit Court for Sumner County

No. 21674-C C.L.Rogers, Judge

No. M2001-02260-COA-R3-CV - Filed August 7, 2002

AND

GALLATIN HOUSING AUTHORITY v. MARGARITA FLORES

 Appeal from the Circuit Court for Sumner County

No. 21673-C C.L.Rogers, Judge

No. M2001-02262-COA-R3-CV - Filed August 7, 2002

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This appeal arises from two detainer warrants issued on behalf of appellee Gallatin Housing

Authority (hereinafter, "GHA"), in the General Sessions Court for Sumner County against the

appellants, public housing tenants. The cases were consolidated when appellants appealed to the

Circuit Court of Sumner County. The Circuit Court entered an order restoring possession of the

properties to GHA, finding that the termination of the leases was based on the appellants' theft of

cable services, a lease violation that was not eligible for certain grievance procedures that might

otherwise be necessary for the termination of a public housing lease. After appealing the Circuit

Court's decision, appellants obtained a stay which allowed them to remain in possession of the

properties while their case was pending. Shortly thereafter, appellants entered into new leases with

GHA. These new leases contained no terms reserving GHA's right to evict appellants in the event

that their appeal failed. We find that the new leases extinguished GHA’s right to evict the appellants

for their breach of the prior lease. We therefore reverse the decision of the trial court and remand

this cause with instructions to vacate its order restoring possession to GHA, and to dismiss GHA's

cause against the appellants.
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Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed and 

Remanded

THOMAS W. BROTHERS, Sp. J., delivered the opinion of the court, in which BEN CANTRELL, P.J.,

M.S., and D. MICHAEL SWINEY, J., joined.

Zoe Laakso Doyle, Gallatin, Tennessee, for the Appellants Rebecca Montesillo and Margarita

Flores.

Kurt O. E. Tschaepe, Gallatin, Tennessee, for the Appellee, Gallatin Housing Authority.

OPINION

Facts and Procedural History

Appellants are neighbors in a public housing facility administered by the Gallatin Housing

Authority (hereinafter, "GHA"). Each appellant lived in their dwellings pursuant to leases they had

entered into with GHA. Each lease provides that “[a]ny termination of this lease shall be carried out

in accordance with U.S. Housing and Urban Development regulations, State and local law, and the

terms of the lease.”

One of the appellants legally obtained cable television service for her dwelling. For a brief

time in October of 2000 she allowed the other appellant wrongly to obtain cable by connecting a

wire between the units in which appellants live. Shortly thereafter, in December of 2000, GHA

provided the appellants with notice that their respective leases would be terminated because, in

violation of their respective lease agreements, they had “engage[d] in or permit[ted] unlawful

activities in the unit . . . ,” and “fail[ed] to use ELECTRICAL . . . equipment in a safe manner.” 

Appellants timely filed a request for a grievance hearing. GHA informed appellants that, as

this would be an informal hearing, appellants could not be accompanied by counsel. Counsel for

appellants communicated with GHA, arguing that administrative grievance procedures required by

federal regulations indicated that counsel could attend such hearings. GHA informed appellants that

continued insistence on the presence of counsel at an informal hearing would cause GHA not to hold

the hearing, and would lead GHA to find that the hearing had been waived. In turn, if the appellants

did not voluntarily vacate the properties, GHA would file suit to evict them.

On February 9, 2000, the General Sessions Court for Sumner County issued detainer

warrants against the appellants in favor of GHA. The Circuit Court of Sumner County then heard

appellants’ appeal of this matter, and on August 28, 2001, entered an order restoring possession of

the properties to GHA. The order also found that appellants’ criminal activity was a violation of

their respective leases, and that this criminal activity made this a lease termination that did not

require that the grievance procedure occur prior to GHA’s decision to terminate the lease.

Appellants appealed to this Court on September 14, 2001, and entered an agreed order with GHA

allowing appellants to remain in their dwellings pending the outcome of this appeal.

A statement of the facts in this case might be expected to stop at this point, but appellants

have moved this Court to consider certain post-judgment facts. On May 1, 2002, this Court agreed
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 At this point, it should be noted that the style of this case on appeal has been incorrect. Although both

Rebecca and Dionisio Montesillo were parties to the original General sessions case, Dionisio did not appear, and was

not represented by appellants’ counsel. A Default judgment was entered against him, and he did not timely appeal. 

He alone was evicted from the dwelling at that point, and lived elsewhere for a time. Interestingly, when GHA

entered into a new lease with Rebecca Montesillo on November 15, 2001, Dionisio Montesillo was also a signatory. 

Thus, it appears that GHA entered into a new lease with a party whom they had forcibly evicted several months

earlier. Mr. Montesillo has apparently been allowed to return to the dwelling following a hearing before the Circuit

Court of Sumner County. This is as it should be.

Although the case is not properly before this Court, appellee presented a transcript of the hearing in

response to appellant’s motion to consider post-judgment facts. The Circuit Court, in that hearing, voiced an opinion

that the new leases entered by the parties did not work a waiver of GHA’s right to evict. Our decision today

indicates that, as is customary in Tennessee, a lease is a contract which, if unambiguous, should be interpreted

according to the language contained within the four corners of the document.

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to do so. The relevant post-judgment facts are that, on November 15, 2001, two months after GHA

obtained eviction orders from the Circuit Court, and one month after appellants filed their notice of

appeal, GHA entered into new public housing leases, each covering a one year term, with both

appellants.1

 Neither lease included any terms referencing the pending litigation, reserving GHA’s

rights to evict the appellants, or making the completion of the lease term contingent on appellants’

success in this appeal.

Law and Analysis

In consideration of the post-judgment facts, the primary issue in this case has become

whether, by entering into new leases with appellants on November 15, 2001, GHA effectively

waived its right to evict the appellants for their breach of the prior lease. Appellants raise two other

issues. The first concerns the propriety of terminating public housing leases based on an alleged

theft of cable, and the second concerns whether GHA properly refused to allow appellants’ counsel

to attend an informal grievance hearing. Because we find that the new leases entered into by GHA

and the appellants are dispositive, these other issues are pretermitted.

Leases are contracts, and must be interpreted according to customary rules of construction.

49 Am. Jur. 2d Landlord and Tenant § 43 (2001). “The cardinal rule of construction of written

instruments is that the intention of the parties as ascertained from the language of the instrument

controls.” St. Paul Surplus Lines Ins. Co. v. Bishops Gate Ins. Co., 725 S.W.2d 948, 951 (Tenn.

App. 1986)(citing First Am. Nat’l Bank v. Chicken Sys. of Am., Inc., 510 S.W.2d 906, 908 (Tenn.

1974)). Where the lease is unambiguous, its language establishes the intent of the parties, and the

interpreting court must construe the contract as written, according to its terms. Petty v. Sloan, 197

Tenn. 630, 637-39, 277 S.W.2d 355, 358-59 (1955). “Furthermore, this court cannot make a new

contract for the parties, but can merely construe the lease as written.” St. Paul Surplus Lines Ins.

Co., 725 S.W.2d at 951 (citing Stone v. Martin, 185 Tenn. 369, 374, 206 S.W.2d 388, 390 (1947)).

Finally, if a landlord has knowledge of a tenant’s breach of a lease, and her actions are inconsistent

with an intention to declare the tenant in breach of the lease, those actions may amount to a waiver

of the breach regardless of her subjective intentions. Woods v. Forest Hill Cemetery, Inc., 183 Tenn.

413, 422, 192 S.W.2d 987, 990 (Tenn. 1946).

Against these fairly elementary rules of law, GHA has argued that, due to alterations in the

federal regulatory scheme governing public housing, GHA was required to enter into new leases with
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every public housing tenant within its purview. However, it is undisputed that when the parties

entered these new leases, GHA did not include any lease provisions that may be read as reserving

GHA’s right to evict the appellants for their breach of the prior lease. Further, there appears to be

no regulation that would prevent GHA from including such a lease term in its leases. Thus, the new

leases must be interpreted as exactly that–new leases–rather than as extensions of the leases signed

the prior year.

The record shows that GHA had knowledge of the appellants’ breach of the prior lease.

Despite this knowledge, GHA entered into new leases with the appellants. These new leases did not

include any terms reserving GHA’s right to evict the appellants for their breach of the prior lease.

Regardless of whether GHA consciously intended to waive its right to pursue the eviction of the

appellants, that right was extinguished as soon as the new lease was entered. Therefore, this court

finds that the order in this case must be vacated, and the cause against the appellants dismissed as

moot. This cause is therefore remanded to the Circuit Court of Sumner County for further

proceedings consistent with this opinion. The costs on appeal are assessed against the Appellee,

Gallatin Housing Authority.

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THOMAS W. BROTHERS, SPECIAL JUDGE