1 

### IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE May 7, 2002

Session
GALLA TIN HOU SING AU THORITY v. REBE CCA & DIONIS IO 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 FL ORES
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

________________________ This appeal a

rises fr om two deta

iner war rants i ssued on behalf of appellee Gallatin Housing Authority (hereinafter, "GHA"), in the Gener al Sessions Court for Sumner Cou nty aga inst the appella nts, public housing tenan ts. T he cases were consolidated when a ppellants appealed to the Circuit Courtof Sumner Cou nty. The Circuit Court entered an order restoring possession of the properties to GHA, f

inding t hat the termination of the leases was based on the appellants' thef t of cable services, a lease violation that wa s not eligi ble for certain grievance proc edures that might otherwis e be neces sary for th e termina

tion of a public hous ing lease . After a ppealing the Circu it Court's decision , appella

nts obtained a stay

which all owed the

m to remain in possession of the properties while their case was pending. Shortly the reafte r, appellants ente

red into new lease s with GHA. These new leases contained no terms rese rving GHA's rig

ht to evict appellants in the event that their appeal failed. We find that the new lease s extingui shed GHA ’s right to evict the appella nts 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 restoringpossessio n to GHA, a nd to dismissGHA's
cause a gainst the appella nts.2

Tenn. R. App.P. 3 Appeal as of Right ; Judgment

of the Cir

cuit Cour

t Rever sed and Remanded

T HOMA S W. B ROTHERS , Sp. J., delivered the opinion of the court, in which B EN C ANTR ELL , P.J. , M.S., and D. M ICHAEL S WINEY , J., joined.

Zoe Laakso D oyle, Ga

llatin , Te nnessee , for the Appellan

ts Rebecc a Montesi llo and Ma rgarita Flores.
Kurt O. E. Tschaepe, Gallatin, Tennessee, f or the Appellee, Gallatin Housing Authority.

OPINION
Facts and Procedural History
Appellan ts are neighbors in a public housing facility administered by the Gallatin Housing Authority (hereinafter, "GHA"). Each a ppellant lived in their dwellings pursuant to leases they had entered into with GH

A. Each l ease

provides that “[a]ny termination of this lease shall be carried out in accord ance with U.S. Housing and Urban Development regulations, State and local law, and the terms of the lease.” One of the ap

pellants legally obtained cable television service for her dw elling. For a brief time i n October of 2000 she allowed the other appellant wrongly to obtain cable by connecting a wire betwee

n the unitsin which a

ppellant s live. Shor

tly there after, in December of 2000, GHA providedthe appe llants with notice th at their r

espective lease s would be terminat ed beca use, in violation of their respective leaseagreements, they had “engage[d] in or permit[ted] unlawful activities in the unit . . . ,” and“fail[ed] to use ELECTRICAL . . . equipment in a safe manner .” Appellan ts timely filed a request for a grievance he aring. GHA informed appellants that, as this would be an informal hearing, appellants could not be ac companied by counsel. Counsel for appella nts communicatedwith GHA, arguing that administrative grievance procedures requir ed by federal regulations indicated that counsel could attend such hea rings. GHA informed appellants that continued insistence on the presence of counsel at an inf

ormal he aring would cause GHA not to

hold the hearing, and would lead GHA to find that the hearing had bee n waived . In turn, if the ap pellants did not volu

ntarily va cate the propert ies, GHA would file

suit to evict them. On February 9, 2000, the General Sessions Court for Sumner Cou nty issued detainer warrants against the appellants in favor of GHA. The

Circuit Cou

rt of Sumne

r County then heard appella nts’ appeal of this matter, and on August 28, 2001, entered an order restoring possession of the properties to GH A. The or der also found that appellants’ criminal activity was a violation of their respective leases, and that this criminal activity made this a lease ter minat ion that did

not require that the g

rievanc e proce dure occ

ur prior to GHA’s d

ecision to

terminat e the le ase

. Appellan ts appealed to this Court on September 14, 2001, and entered an agreed order with GHA allowing a

ppellant s to remain in their d wellings p ending the

outcome o f this app eal. A statemen

t of the fa cts in this c ase might b e expected to stop at t his poin t, but appe

llants have moved thisCourt to co nsider c ertain post-judgment facts. On May 1, 2002, this Court agreed1 At this po int, it should be no ted tha t the style of this c ase o n app eal has been incorr ect. Altho ugh b oth

Rebecca and Dionisi o Montesill o were part ies t o the ori ginal General se ssi ons case, Dionisi o did not appear, and was not rep resen ted b y app ellants’ co unsel. A De fault jud gme nt was e ntered against h im, and he did not time ly app eal. He a lo ne wa s e vi ct ed f ro m t he dwe ll in g a t t

ha t p oi nt , a nd li ve d el se wh er e f or a t im e. In te re stin gl y, wh en GHA entere d into a new lea se with R ebe cca M ontes illo on N ove mbe r 15 , 200 1, D ionisio M ontes illo was a lso a sign atory. Thus, it appears that GHA entered into a new lease wit h a party whom they had forcibly evicted several months earlier. M r. M ontes illo has a ppa rently be en allo wed to return to the d welling fo llowing a hear ing be fore the Circu it Court of Sumne r County. This is as it should be. Altho ugh the case is no t prop erly be fore this C ourt, ap pellee prese nted a transcr ipt of the hearin g in respon se t o appel lant ’s moti on to c onsi der pos t- judgmen t f

acts . The Ci rcui t Cour t, in t hat heari ng, voic ed an opi nion that the new leases enter ed by the parti es did not work a wai ver of GHA’s ri ght t o evict . Our decis ion today indica tes t

hat, as is customar y in Tennessee, a leas e is a contract which, if unambiguous , shoul d be inte rpreted

acco rding to the lan guag e con tained within the fo ur co rners o f the do cum ent.
3 to do so. The relevant post-judgment facts are that, on November 15, 2001, two months after GHA obtained eviction

orders f rom the Cir

cuit Court , and one

month afte

r appell ants filed their notice of appeal, GHA entered into new public housing leases, ea ch cove rin g a one ye ar term, with both appella nts. 1 Neither

lease included any terms referencing the pending litigation, reserving GHA’s rights to evict the appellants, or making the completion of thelease term con tingent on appella nts’
successin this app eal.
Law and Analy sis In conside r ation of th

e post-ju dgment fa

cts, the p rimary is sue in this c ase has b ecome whether, by entering into new leases with appellants on No vember 1 5, 2001, G HA effectively waivedits right to evict the appellants for their breach of the prior lease. Appellants raise two other issues. The first concerns the prop riety of terminating public housing leases based on an alleged theft of cable, and the second concerns w hether GHA properly refused to allow a

ppellant s’ counsel to attend an informal

grievance hear

ing. Beca usewe find that the new leases entered into by GHA and the appellants are dispositive, these other issues are pre termitted. Leases are contracts, and must be interpreted according to customary rules of construction. 49 Am. Jur. 2d Landlord an d Tenan t § 43 (2001). “The cardinal rule of construction of written instrumen ts is that the intention of the parties as ascertained from the language of the instrument
co ntrols.” St. Paul Surplus Lines Ins. Co. v. Bishops Gate Ins. Co. , 725 S.W.2d 948, 951 (Tenn. App. 1986) (citi ng First Am. Nat’l Bank v. Chicken Sys. of Am., Inc. , 510 S.W.2d 906, 908 (Tenn. 1974)). Where the

lease is unambig

uous, its la

nguag e establ

ishes the intent of t

he parti es, 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 ne w contract for the par ties, but can merely construe the lease as written.” St. Paul Su rplus Lines Ins. Co. , 725 S.W. 2d at 9 51 (ci ting Stone v. M artin , 185 Tenn. 369, 374, 206 S.W.2d 388, 390 (1947)). Fi na ll y, if a landlord has knowledge of a tena nt’s breach of a lease, and her actions are inconsistent withan intention to declare the tenant in breach of the lease, those actions may amount to a wa iver of the breach regardle ss of her subjective intentions. Woods v. Forest Hill Cemetery, Inc

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

fairly ele mentary rule s of law, GHAhas argued that, due to alterations in the federal regulatory

scheme governing public housing, G HA was required to ent er into ne w leaseswith4

every public housing tenant within its purview . However, i t is undisputed that when the parties entered these new leases, GHA

did not include any lease provisions that may be rea d as reserving GHA’s right to

evict the appella nts for their breach of the prior lease . Further, there appears to be
no regula tion that w ould prev ent GHA f rom includ

ing such a lease term in its leases. Thus, the new leases must be interpre

ted as exa ctly that–new leases–rather than as extensions of the leases signed the prior yea

r. The record shows that GHA had knowledge of the a ppellants’ breach of the prior lease. Despite this knowledge, GH

A entered into new lea ses with the appellants. These new leases did not include any

terms re serving

GHA’s ri ght to ev

ict the ap pellants for their breach of the prior lease. Regar dless of whether GHA consciously intended to waive its right to pursue the eviction of the appella nts, that right was extinguished as soon as the new lease wa s entered. Therefore, this court finds that the order in this case must be vacate d, and the cause a gainst t he appellants dismissed as moot. This cause is therefore remanded to the Circu it Court of Sumner County for further procee dings con sistent w ith this opinion. The costs on appeal are assessed aga inst the Appellee, Gallatin Housing Authority.

______________________________________ THOMAS W. BROTHERS, SPECIAL JUDGE