THI RD D I VI SI ON DOYLE, P. J.

, M ERCI ER and H ODGES, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

https ://w w w

. ga a ppe a ls .us /r ule s

D E A D LIN E S A R E N O LO N G E R TO LLE D IN T

H I S
C O U R T. A LL FILIN G S M U ST B E S U B M I TTE D WITH IN
TH E TIM E S S E T B Y

O U R C O U R T R U LE S

.

M ar ch 1, 2021



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A2 0 A1 72 3

. THE H ATCHET T FIRM

, P. C. et al

. v

. A TLANTA LIFE FINANCIAL GROUP, INC. M E-0 0 6

M E R C I E R , J u dg e.

Beg i n n in g i n 2 0 14

, A t l an t a Li fe Fi n an ci al G ro u p , In c. (“ At l an t a Li fe”)

s u b l eas ed o ffi ce sp ace t o Th e Hat ch et t Fi rm , P. C. an d D u rh am Law Gro u p , P. C.

(“ s u b t en an t s ”). Fo l lo wi n g t he s u b t en an t s ’ fai l u re t o p ay ren t , At l an t a Li fe fi l ed s u i t

ag ai n s t t h e m , t h ei r m an ag in g d i rect o r an d p ri n ci p al cl ai m i n g b reach o f co n t ract

.

At l an t a Li fe fi led a m o t io n fo r s u m m ary j u d gm en t o n i t s cl ai m s an d t h e s u b t en an t s ’

co u nt ercl ai m s fo r b reach o f co n t ract

, reco u p m en t

, an d at t o rn ey s fees

, w h i ch t h e t ri al

c o urt g ran t ed

. Th e s u b t en an t s ap p eal

, cl ai m i n g t h at A t lan t a Li fe wai v ed i ts ri g h t t oco l l ect ren t an d b reach ed t h e s u b l eas e. 1 Fo r t h e fo l l o wi n g reas o ns , we affi rm i n p art

an d rev ers e i n p art

.

Su m m ary j u d gm en t i s p r o p e r i f th e “ pl ead i n gs , d ep o s i ti o n s , an s wers to

i n t erro g at o ri es , an d ad m i ss io n s o n fi l e, to g et h er wi t h t h e affi d av i ts

, i f an y , sh o w t h at

t h ere i s no g en u i n e i ss u e as t o an y m at eri al fact an d t h at th e m ov i n g p art i s en t i t l ed

t o a ju d g m en t as a m at ter of l aw[.] ” OCGA § 9 -1 1 -5 6 (c). “ In o ur d e no v o rev i ew o f

t h e g ran t o f a m o t io n fo r s u m m ary ju d g m en t

, we m

u s t v i ew t h e ev i d en ce, an d al l

reas on ab l e i n feren ces dr awn t h erefro m , in t he l i g ht m o s t fav o rab l e t o t h e

n o n m o v an t .” Ci rcl e K S to r es v. T. O. H. As s oc. , 3 1 8 Ga. A p p

. 75 3

, 7 5 4 (7 3 4 SE2 d

7 5 2 ) (2 0 1 2 ) (ci t at i o n an d p u nct u at i o n o m i t t ed ).

So v i ewed

, t he ev i d en ce s h o wed t h e fo l lo wi n g

. In 2 0 1 2

, At l a n t a Li fe l eas ed

o ffi ce s p ace, l o cat ed at 1 9 1 Peach t ree St reet i n At l an t a, fro m 1 9 1 Peach tree Pro

ject

LLC (“ l an d l o rd ”) 2

, pu rs u an t t o a “ m as t er leas e.” On N o v em b er 1 5

, 2 0 1 4

, At l an t a Li fe

1 At l an t a Li fe al s o fi l ed s u i t an d o b t ai n ed su m m ary ju d g m en t o n co n v ers i o n

an d w ri t o f p o s s es si o n cl ai m s rel at ed to t h e su b ten an t s ’ refu s al t o r et u rn ren t ed
fu rn i sh i ng s an d art

. Th e s u b ten an t s d o n o t ap p eal t h e t ri al co u rt ’ s ru l i n g o n t h e wri t

o f p o ss es s i o n an d co nv ers i on cl ai m s

.

2 A t s o m e p oi n t 1 9 1 Peach tree Pr o ject

, LLC, s o l d t h e p ro p ert y t o Ban y an St reet / GAP 1 9 1 Peach tree Own er, LLC, bu t t h e b ri efs d o n ot p o i n t t o w h en t h e s al e

o ccu rred

. Fo r t h e pu rp o s es o f t h i s ap p eal

, th e dat e o f s al e i s n o t rel ev an t

, an d we wi l l

r e f er t o 1 9 1 Peach t ree Pro

ject

, LLC an d Ban y an , i t ’ s s ucces s o r i n i n t eres t

, co l l ect i v el y

2an d T h e H at ch et t Fi rm en tered i n t o a s u b leas e, wh i ch was s u b s eq u en t l y am en d ed o n

J u n e 2 9, 2 0 1 6

, t o ad d Th e Du rh am Law Gro u p

.

Beg i n n in g in Jan uary 20 1 8

, t he s u b t en an t s ad m i t t ed l y fai l e d t o p ay t h e fu l l

am ou n t o f ren t req u i red b y t h e s u b l eas e t o At l an t a Li f e

. F u rt herm o re, beg i n n i n g in

No v em b er 2 0 1 8

, t hey ceas ed p ay i n g an y ren t t o A t l an t a L i f e

. O n A p ri l 1 2

, 2 0 1 9,

At l an t a L i fe s en t a dem an d l et t er t o t h e s u b t en an t s d em an d i n g , in t er al ia, t h e u n p ai d

ren t

.

On M ay 1 7

, 2 0 1 9

, t h e s u b t en a n t s en t ered i n t o a l eas e ag reem en t fo r t h e

s u b l eas ed prem i s es d i rect l y w i t h t h e l an d l o r d

. O n t h e s am e d ay , t h e l an d l o rd an d

At l an t a L i fe en t ered i n t o an am en d ed l eas e ag reem en t t h at term i n at ed t h e su b l eas ed

p o rt i on

.

At l an t a Li fe fi l ed th e u n d erl y i n g l aws ui t ag ai n s t t h e s u b t en an t s o n M ay 3 1,

2 0 1 9

, a l l eg i n g t hat t h e s u bt en an t s b reach ed t h e s u b leas e b y fai li n g t o p ay p as t d u e

ren t . Th e s u b t en an t s fi led an an s wer an d co u n tercl ai m , s eek i n g d am ag es fo r b reach

o f co nt ract

, reco u pm en t

, an d at t o rn ey s fees

, cl ai m i n g t h at At l an t a Li fe t erm i nat ed t h e

m as t er l eas e wi t h o u t t h ei r co n s en t , wh i ch b reach ed t h e s u b l eas e.

as “ l an d l ord .”

31

. Th e s ub t en a n t s d o n o t co n t en d th at t h ey p ai d th e fu ll am o u n t o f ren t fro m

J an u ary 20 1 8 t o Ap ri l 2 0 19

. In s t ead t h ey ad m i t t o su b m i t t i n g o n l y p art i al ren t

p ay m en t s t o At l an t a Li fe fo r t en m o n th s , an d t h en fai l i n g t o p ay an y ren t t o At l an t a

Li fe fo r s i x m o nt h s

. Ho wev er, t h e su b t en an t s cl ai m t h at t h e t ri al co u rt erred by

g ran t i n g At l an t a Li fe’ s m o t i o n fo r s um m ary ju d g m en t b e c au s e a g en u i ne i s s u e o f

m at eri al fact rem ai n s as t o wh et h er At l an ta Li fe wai v ed t h e term s o f th e s ub l eas e by

n o t i s s u i n g a d em an d fo r t h e u n p ai d ren t u n t i l i ts Ap ri l 1 2 , 2 0 1 9 l et t er.

A m ut u al d ep art u re fro m t h e term s o f an ag reem en t res ul t s i n a

q u as i -n ew ag reem en t su s p en d i n g t h e o ri g i n al t e r m s o f t h e ag reem en t

u n t i l o ne p art y h as gi ven t h e o t h er reas o n ab l e n o t i ce o f i t s i n t en t to rel y

o n t h e o ri g i n al t erm s

. Th e q u es t i o n wh et h er t h e part i es ’ m ut u al co n d uct

cau s ed a wai v er an d effect ed a q uas i -n ew ag reem en t o r d i n ari l y i s a

q u es t i o n fo r t h e ju ry

.

Ci r cl e K S t o r es , s u p r a a t 7 5 4 -7 5 5 (1 ) (ci t at i o n an d pu n ct u at i o n o m it t ed ). See al s o

OCGA § 1 3-4 -4

. “ Th e b u rd en of p ro o f l i es wi t h t h e p art y as s ert in g w ai v er[.] ” Mi ll er

v. Hi awa s s ee A l len Fa mi l y, LLC

,

_ _ _ Ga. Ap p

.

__

_ (8 49 SE2 d 50 0 ) (2 0 2 0 ) (ci t at i o n

an d p u n ct u at i o n o m i t t ed ).

In 1 9 7 9

, o u r Su p rem e C o u r t an s wered th e fo l l o wi n g q u es t i on i n t h e

affi rm at i v e: “ d o es t h e ev i d en ce o f rep eat ed l at e, i rreg ul ar p ay m en t s accep ted b y t h e

4s el l er creat e a fact u al di s pu t e as t o wh et h er a q u as i n e w a g r e em en t was creat ed ”? 3

S mi th v. Gen

. F

i na n ce Co r

p

. o f Ga

. , 24 3 G a. 5 0 0 (2 5 5 SE2 d 1 4 ) (1 9 7 9); See al s o Ga.

Co n s t

. o f 1 9 8 3

, Art

. V I, Sec. VI, Par. VI (“ Th e d eci s i o n s o f t h e Su p rem e Co u rt s h al l

b i n d al l o t h er co u rt s as p reced en t s

. ”). W hi l e t he S mi t h cas e d is cu s s ed t h e s al e o f an

au t o m ob i l e an d d eal t wi t h l at e, i rreg u l ar p ay m en t s , rat h er t h an p art i al o r n o n -ex i s t en t

ren t p ay m en t s , t he u n d erl y i ng l o g i c i s i d en ti cal to th e i ss u e at h an d

. See i d

. at 5 0 0

. By

rep eat ed l y accep t in g p ay m en t (o r n o n p ay m en t ) i n d ev iat i o n fro m t h e t erm s s t i p u l at ed

i n t h e s u b l e a s e , a fact ual d i sp u t e aro s e as t o wh et h er a q u as i -n ew ag reem en t was

creat ed

. See i d

. at 5 0 1

. At l an t a Li fe d i d n o t o b ject t o t h e p art i al p a ym e n t o r n o n

p ay m en t u n t i l 1 6 m o n t h s aft er t h e s ub t en an ts fi rs t fai l ed t o p ay t h e ren t i n fu l l

.

Fu rt h e r m o r e, t h e ex i s ten ce o f an an t i -wai v er p ro v i s i o n i n th e s u b l eas e d o es n ot

p recl u d e w a i v er, as accep t an ce o f i rreg u lar pay m en t s rai s es a ju ry qu es t io n as to

wh et h er t h e an t i-w a i v er p ro v i si o n i n t he s ub l eas e was wai v ed

. Id .; s ee al s o Y as h

S o l u t i o n s v. New Y

o r k Gl ob al Co n s u l t a n t

s , 3 5 2 Ga. A p p

. 1 2 7

, 1 3 6 (1 ) (a) (8 3 4 SE2 d

3 In S mi th

, t h e q u as i -n ew ag re e m e n t was fo rm ed p u rs uan t t o Co d e 2 0 -1 1 6

, a
p re-cu rs o r t o OCGA § 1 3 -4 -4

, w h i ch s t at es t hat “ [w] h ere p art i es , i n th e co u rs e o f t h e

ex ecu t i o n o f a co nt ract

, d ep art fro m i t s t erm s an d p ay o r recei v e m o n ey u n d er s u ch
d ep art u re, b efo re ei t h er can reco v er fo r fai l u re t o p u rs u e t h e l et t er o f th e ag reem en t

,
reas on ab l e n o t i ce m

u s t b e g iv en t o t h e ot h er o f i n t en t i on t o rel y on t h e ex act t erm s o f

t h e ag reem en t . Th e co n t ract wi l l b e s u s p en d ed b y t h e d ep art u re u n ti l s uch n o t i ce.”

51 2 6 ) (2 0 1 9 ) (“ u n d er Geo rg i a l aw, a n o -wai v er o r an t i -wai v er p ro v i s i o n i n a co n t ract

m ay i t s el f b e wai v ed

. ”)

Th ere i s n o d i s p u t e in t he p res en t m at t er t h at At l an ta L i fe accep t ed p art i al ren t

p ay m en t o r n o ren t pay m en t at al l fro m t he s u b t en an t s fo r 1 6 m o n t h s , an d A t lan t a Li fe

d o es n o t cl ai m t h at i t n ot i fi ed t he s u b t en an t s o f i t s d es i re to ad h ere t o t h e s u b l eas e’ s

t erm s u n t i l 1 6 m o n t hs aft er th e fi rs t p art i al ren t p ay m en t

. As su ch

, p urs u an t t o S mi t h

,

an is s u e o f m at eri al fact ex i s t s as t o wh et h er t h at acce p t a n c e c r e a t ed a q u as i -n ew

ag reem en t

. S e e a l s o Ja r a ys i v. S eb as t ia n , 3 1 8 G a. Ap p

. 4 6 9

, 4 7 5 -4 7 6 (1 ) (c) (7 3 3

SE 2 d 7 8 5 ) (2 0 1 2 ) (d i sap pro ved o f o n o t h er g ro u n d s by Geo r g e v. Her cu l es R ea l

Es t a t e S vcs

. , 3 39 Ga. Ap p

. 8 4 3

, 8 5 1 (2 ) (a) (i i ) (7 9 5 SE2 d 8 1 ) (2 0 1 6 ) ; S ha l o m Fa r ms

v. Co lu mb u s Ba n k & Tr us t

, 1 6 9 Ga. Ap p

. 1 4 5

, 1 4 7 ( 2 ) ( 3 1 2 SE2 d 1 3 8 ) (1 9 8 3 )

(p h y s i c a l p r e ced en t on l y ) (wh et h er a p art y ’ s fai l u re t o m ak e p ay m en ts creat ed t h e

ex i s t en ce o f a qu as i -n ew ag reem en t was a q u es t i on fo r t h e ju ry ) ; Ba xt er v. Ga

. Fed

.

S & L

, 1 5 2 Ga. Ap p

. 7 5 3

, 75 3 -7 5 4 (1 ) (2 6 4 SE2 d 2 4 2 ) (1 9 7 9 ). Acco rd i n g l y , t h e t ri al

co u rt erred b y

g ran t i ng s u m

m ary ju d g m en t t o At lan t a Li fe o n i t s b reach o f co n t ract

cl ai m , an d t h e ru l i ng is rev ers ed

. See S mi t h

, s u p ra; co m

p are Ci rcl e K

, s u p ra at 7 5 5 (1 )

(wh ere l an d l o rd d i d n ot accep t t h e p art i al ren t pay m en t s “ w i t ho u t i d en t i fy in g t o t h e

t en an t t h at h e’ s u n d erp ay in g h is ren t ” t h ere was n o fact is s u e as t o wai v er); Du n ca n

6v. La g u n a s , 2 5 3 Ga. 6 1

, 62 -6 3 (1 ) (3 16 SE2 d 7 4 7 ) (1 9 8 4) (n o m u tu al d ep art u re fro m

co n tract wh en th ree l at e p ay m en t s were accep t ed b ecau s e t h e accep t i n g part y g av e an

“ ex p res s i o n o f d i s pl eas u re,” wh i ch co n v ey ed t h at h e d i d n o t i n t en d t o w ai v e th e t erm s

o f t h e co n t ract ).

2

. Th e s u b t en an t s cla im tha t t h e t ri al co u rt erred by g ran t in g s u m m ary ju d g m en t

t o A t lan t a Li fe o n th ei r co un t ercl ai m fo r b reach o f co n t r a c t

, reco u p m en t

, an d

at t o rn ey s fees

. In s u p p o rt o f th ei r cl ai m , t he s u b t en an t s s t at e: “ At l an t a L i f e d i d n ot

d i s p u t e t hat i t b reach ed t h e M as t er Leas e b y fai l i n g t o p ay ren t t o [t h e l an d l o rd ]

.

At l an t a Li fe di d n o t d i s p u t e th at [t h e lan d l o rd ] fi l ed an ev i c t i o n p ro ceed i ng ag ai n s t

A t l a n t a Li fe.” Ho wev er, t h e s ub t en an t s fai l t o s u p p o rt t hes e s tat em en t s wi t h a n y

ci t at i o n s t o t h e reco rd

, co n t rary t o t h e req u irem en ts i n Co u rt o f A p p eal s Ru l e 2 5 (a)

(1 ) an d (c) (2 ) (i ). “ W e rem i n d co u n s el t hat i t i s n o t t h e jo b o f t h e Co urt o f Ap p eal s

t o cu l l t h e reco rd o n b eh a l f o f a p art y , an d t h at a l ack o f p ro p er ci t at io n s g reat l y

h i n d ers ou r co n s i d erat i o n o f t h e i s s u es o n ap p eal .” Bu l g in v. Ga

. Dep t

. o

f Tr a n sp

. ,

2 9 2 Ga. Ap p

. 1

, 2 (1 ) (6 6 3 SE2 d 7 3 0 ) (2 0 0 8 ) (ci t at i o n an d p u n ct uat i o n o m i t t e d ).

Fu rt h erm o re, “ t h e b u rd en i s o n t h e p art y al l eg i n g erro r t o s ho w i t affi rm at i v el y b y t h e

reco rd

. W h en t h e b u rd en i s n o t m et

, t h e ju d g m en t co m p lai n ed o f i s as s u m e d t o b e

co rrect an d m

u s t b e affi rm ed .” Fl emi n g v. Ad va n ced St o r es , 3 0 1 Ga. Ap p . 7 3 4 , 7 3 6

7(6 8 8 SE2 d 4 1 4 ) (2 0 0 9 ) (ci t at i o n an d p u n ct u at i o n om i t t ed ). As t h e su b t en an t s d o n ot

s u pp o rt t h is cl ai m o f b reach of co n t ract wi t h ci t at i o n t o t h e reco rd

, it is d eem e d

ab an do n ed . See Co urt o f Ap p eal s Ru l e 2 5 (c) (2 ) (i ).

Th e s u b t en an t s al s o cl ai m t h at At l an t a Li fe breach ed t h e s u bl eas e by ex ecu t i n g

an am en ded m as t er leas e wi t h t h e l an d l o rd

, wh i ch t erm i n a t ed t h e p ort i on o f t h e

m as t er leas e reg ard i n g t h e s u b l eas ed p ro pert y

. Th e s u b t en an t s cl ai m t h at b y s i g n i n g

t h e am en d ed m a s t e r l e as e, A tl an t a Li fe b reach ed a pro v i si o n o f t he s ub l eas e wh i ch

s t at ed t h a t A t l an t a L i fe wo u l d n o t t erm in at e t h e m as t er l eas e “ w i t ho u t t h e p ri o r

ex p res s wri t ten co n s en t ” o f t h e s u b t en an ts

.

Ho wev er, t he su b ten an t s, At l an t a Li fe, an d t h e l an dl o rd si gn e d a do cu m en t

t i tl ed “ Co n s en t t o Fi rs t Am en d m en t t o Su b l eas e,” wh i ch p ro v i d ed t h at i f t h e m as t er

l eas e ex pi res o r t erm i n at es fo r an y reas o n d u r i n g t h e t erm o f t h e s u b l eas e, t h e

s u b l eas e s i m

u l t an eo u s l y t erm i nat es o r ex p i res

. Th e co n s en t ag reem en t al s o co n t ai n ed

a pro vi s i o n s t a t i n g in t h e ev en t t h ere were an y co n fl i ct s b et w een t h e co n s en t

ag reem en t an d t he su b leas e, t h e p ro v i s i o n s o f th e c o n s e n t ag reem en t “ p rev ai l

u n affect ed ” o v er th e su b leas e. If t h e s u bl eas e’ s p ri o r ap p ro v al req u i rem en t was read

i n t o t h e co n s en t ag reem en t

, i t wo u l d fru s t rat e t h e p ro v i s i o n t h at al l ows fo r t he m as t er

l eas e t o b e t erm i n at ed (ab s en t t h e s u bt en an t s’ ap pro v al ), an d t o s u bs eq u en t l y

8t erm i n at e t he su b l eas e. As su ch

, t h e co ns en t ag reem en t co n fl ict ed wi t h th e s u b l eas e

req u i rem en t t h at At l a n t a L i f e o b t ai n t h e s u b t en an t ’ s wri t t en co n s en t p ri or t o t h e

t erm i n at i o n o f t h e m as t er l eas e. Th erefo re, t he co n s en t ag reem en t p rev ai led o v er t h e

s u b l eas e. An d A t l a n t a L i f e d id n o t b reach t he s u b l eas e wh en i t en tered i n t o an

am en d ed m as t er l eas e (t erm i nat i n g t h e s u bl eas e) b ecau s e i t w as al l o w ed t o d o s o by

t h e co n sen t ag reem en t

, wh i ch co v ered t he s am e s u bject m at t er. See W a l l a ce v. Bo ck

,

2 7 9 Ga. 7 4 4

, 74 6 (1 ) (6 2 0 SE2 d 8 2 0 ) (2 0 0 5 ) (“ An ex is t in g co n t ract i s s u pers ed ed an d

d i s ch arg e d w h e n e v er t h e p art i es s u b s eq u en tl y en t er u p o n a v al id an d i n co n s i s t en t

ag reem e n t co m

p l et el y co v eri n g t h e s u b ject -m at t er em

b raced b y th e o ri g i n al

co n tract

. ”) (ci t at i o n , em

p h as i s an d p u nct u at i o n o m i t t ed ). A s s u ch

, t h e s u b t en an t ’ s

co u nt ercl ai m fo r b reach o f co n t ract fai l s , an d we affi rm t h e t ri al co u rt ’ s ru l i n g

g ran t i n g s u m

m ary ju d gm en t t o At l an t a Li fe o n t h at cl ai m

.

Ad d it i on al l y , th e subten an t s ’ cl ai m s fo r reco u p m en t an d at to rn ey s fees al s o fai l

as t h ey are d ep en d en t on t h e i r b r e a ch of co n t ract cl ai m

. 4 As d i s cu s sed ab o v e, t h ere

i s n o is s u e o f m at eri al fact as t o wh et h er At l an t a Li fe b reach ed i t s s ub l eas e wi t h t h e

4 “ A reco u p m en t i s a ri g h t o f t he d efen d an t t o h av e a d ed u ct i o n fro m t h e

am ou n t o f t h e p l a i n t i ff’ s d am ag es becau s e t h e p l ai n t i ff h as no t co m p l i ed wi t h t h e

cro s s -o b l i g at i o n s o r i nd ep en d en t co v en an ts ari s i n g un d er t h e c o n t r a c t b ei n g s u ed

u p o n .” A u t o ma t ed Pr i n t v. Ed ga r , 28 8 Ga. A p p

. 3 2 6

, 3 3 0 (2 ) (6 5 4 SE2 d 41 3 ) (2 0 0 7 );

s ee OCGA § 1 3 -7 -1 3.

9s u b t en an t s

. As s u ch

, t h e cl ai m t h at At l an t a Li fe i s l i ab le fo r reco u p m en t fai ls

, an d we

affi rm t h e t ri al co u r t ’s g r a n t o f s um m ary ju d g m en t o n t h i s gro u n d

. Si m i l arl y , t h e

s u b t en an t s ’ d eri v at i v e cl ai m fo r at t o rn ey s fees fai l s

. See Ho u s to n Ho s p s

. v. Fel d

er ,

3 5 1 Ga. Ap p

. 3 9 4

, 3 9 9 (4 ) (8 2 9 SE2 d 1 8 2 ) (2 0 1 9 ) (“ d eri v at i v e cl ai m s o f at t o rn ey fees

. . . wi l l n o t l i e i n t h e ab s en ce o f a fi n d i n g o f co m p en s at o ry dam ag es on an un d erl y i n g

cl ai m ”) (ci tat i o n an d p u n ct u at i o n o m i t t ed ).

J u d g men t rever

s ed i n p a r t

, a f f i r med in p a r t

. Do

yl e, P. J., a n d Ho d

g es
, J

. ,

co n cu r

.

10