SECOND DIVISION AN DREWS , P. J., MCFADD EN and RA

Y, JJ. N O TICE: Motions for reconsideration must be p hy sically received

in our cl erk’s offi ce within ten days of the date of decision to be deemed timely filed.

http:/ /www .gaappeal s.us/rul es/ July 15, 2014



## In the Court of Appeals of Georgia A14A0592, A14A0593. MARVIN HEWATT ENTERPRISE S, INC

. v. BUTLER CA

PITAL CORPO RATION; and vice versa. M C F ADDEN , Judge. This dispute between a secured lender and a landlord arose after the entity that hadborrowe d from

the form

er and rented from the latter in order to operate a convenienc e store w ent

out of business. The lender and landlord had enteredinto a writtenagreem

ent with on e another. Under the term s of that a greem ent

the lender had certain r ights and the

landlord c ertain dut

ies upon of term ination of t

he lease. As to the lende r’s cla im o f breach of that agreement, the central question is whether a termination

occurred. We find the evidence – which es tablishes without dispute that the landlor

d facilit ated a sal e of

the business to another

of its tenants – sufficient to send that questi on to a j ury. We likewise find the eviden ce of that

facilita tion2

sufficie ntto authoriz e a finding that the la

ndlord part

icipated in an exerc ise of dominio n or control over the secured property inconsisten t wi th the lender’s ri ghts and therefor e suffici ent to send t

he lender ’s conve rsion cla im to a jury . But the landlord was entit

led to sum

mary judgm ent on the c laim founde d on the equitable theo ryof unju st enrichm ent becaus e the part

ies had a c ontract. As to the

cou nt erc lai m, we find no abuse of discretion in the trial court’s denial of the lend er’s motions for d iscovery sanct ions and to strike an affidavi t. Case No. A14A0592. 1. Facts. A trial c ourt m ay gra

nt summ ary j udgmen

t when there is no genuine issue as to any m aterial fact and t

he mov ing party

is entitle d to a judgm

ent as a matt er of law. OCGA § 9-11-56 ( c). “We re view a gr ant or deni al of sum

mary jud gme nt de novo and construe the evidence in the light most favorable to the nonmovant.” Citifina n cial Svcs. v. Varner , 320 Ga. App. 170 (739 SE2d 477) (2013) (citation omitted). Viewed in the light m ost favora

ble to the lender, Bu

tler Capi tal Corpor

ation,

as the nonmovant, the

record sh ows that th e landlord, Marvin H ewatt E nterprise s, is the owner of a comm

ercial property on which sits a convenience store/gas station. In 1999, the landlor

d entered in to a m

ulti-y ear lea se of the pr

operty , and in 2007 ,3

Hamilton Mill Food & Gas, Inc. (hereinafter “ the tenant”) assumed that lease. At that time, the tenant

bor rowed $ 250,000 fr

om the lender an d gave the l ender a se curity interest in the store’s assets as collateral for the loan. In connection with that loan transact ion, the lender

and the lan dlord negoti ated the landlord agreem ent at issue in these appe als. The landl ord agree ment p rovided, a mong oth er things, that upon termination

of the lea se, the l ender wo uld have the option of ste

pping into the te nant ’s shoes: That

Landlord

hereby agrees t hat, if t he Lease is term inate d for

any reason, . . . t

he Landlor

d sh all enter into a new lease of the Premises with the Lender at the opt

ion of the L ender. A ll prov isions of th e new lease between

Landlord

and Lender . . . shall be co mm ensuratewith those provis ions of theLease as if the Le ase were not then termina ted.

In April 2011, the tenant informed the landlord that it “w anted out” of th e convenience store, a

nd landlord a

greed to “let

[it] go. ” As par

t of that agreem ent, the tenant pai d all of the rent it owed the landlor

d through Ap ril 2011. N ot wanting the store to stop operating, the landlord instructed the tenant of another of its properties (the “succ essor tena

nt”) to “ buy” a nd take over

the store. The succ essor

tenan t met wi th the tenant’ s owners a t the store ; an em

ployee of the land

lord and an outside4

auditor also were pr

esent. T he auditor estim ated the value of theinventory , and the

successor tenant gav e the tena

nt’s ow ners a che ck to buy

the inv ent ory. The succ essor tenant be gan operat ing the s tore unde r a monthly oral leas e with the la ndlord. In July 201 1, the te nant defaulted on its loan with the lender, and the lender learned that the tenant was no longer operating the store. The lender then demanded money damages from

the landlord. In an October 2011 letter, the landlord’s counsel responded that the tenant had “unila terally abandoned”

the prem ises and it o ffered to letthe lender

assum e the lease, “prov ided all da mage s from

the Tena nt’s bre ach have been cure d.” The

lender rejecte d the offe r and file d this actio n. 2. Breach of

contract. The landlord argues that the trial court erred in deny ing its m otion for

summa ry judgm ent on th e lend er’s breach of contract claim. The lender bases that clai m on its contention

that the e vent s in Apr il 20 11 co nsti tute d a ter minati on of the la ndlo rd’s lease wit h t he t ena nt , tr ig ger in g t he r equ ire me nt in the l andlord agr eement that the landlord give the le nder the opt ion of entering into a new l ease. A lthough the landlord argues that, as a ma

tter of law, th e lease w as not term inated, a fact ques tion exists on th is po in t th at p rec lu des su mmary j ud gmen t o n t he b rea ch o f co nt rac t cl aim.5

As to whethe r the lea se was termina ted, our f irst questi on is wheth er the te nant surrendered the premises or abandoned the lease. In landlord- tenant law , surren der exists when the tenant volun tarily gives up possession

of the prem ises prior to the full term of the lea se and the landlord a ccepts poss ession with intent that the lease

be term inated. Itdiffers from “ abandonment,” as applied to leased prem ises, inasmuch as the latt er is simply an act on the part of t he lessee al one[.] Black ’s Law Dictionary, p. 1444 (6th ed. 1990). “To show a surrender, a mutual agreem ent between lessor and

lessee tha

t the lease

is term inated m ust be clea

rly proved.” Circle K Stores v. T. O. H. Ass ocs. , 3 18 Ga. A pp. 753, 75 7 (2) (734 S E2d 752) ( 2012) (cit ation om itted); a ccord Bla ck’s L aw Dic tionary , supra, p. 1444. I n addition, [i]t has long been the rule in Georgia that surre nd er of a le ase by operation of law m

ay ar ise from any c ondition of f

acts vo lu ntarily assumed by the parti es and incompatible with the continued existence of the rela tion of land

lord and te nant betw een them. W her e a landlord exercises a control over the premises inconsisten t with the tenant ’s right of occupation , he thereby dis charges t he tenant from liability for future rent, and a canc ellation or rescission of the contract is thus effected by agreem ent of the p arties, express or impli ed.6

Savannah Yacht Corp. v. Thunderbolt Marine , 297 Ga. App. 104, 111 (2) (676 S E2d 728) (2009) (citatio ns and punctuation omitted). Accordingly, a surrender, whether express or by operation of law, constitutes a term ination of the lease. Alte rna tiv ely, i f a ten ant ab ando ns a p remises witho ut th e land lord ’s agreem ent, the landl ord has th e option of terminating the lease. Meek v. Mallory & Evans, Inc. , 318 Ga. App. 407, 410 (2) (734 SE2d 109) (2012); Lawson v. Crawford , 220 Ga. App. 447, 4 48 (469 SE 2d 507) (1996). The landlord also may “obtain[ ] another tenant while holding the original tenant liable for any deficiency that m ay occur, or . . . permit[ ] the prem ises to rem

ain vacan t while c ollecting t

he agree d-upon rent from the original tenant.” Lawson , 220 Ga. A pp. at 448 ( citation a

nd punctuati on omitted). The evidenceviewed m

ost favorably to the lender

shows that the tenant asked to surrender

the lease and that, in response , the landlord immediately found another tenant, ent ered into a lea se with tha t successor

tenant unde r differ

ent term s than its lease with the t enant, facilita ted the tra nsfer of the store’ s assets fr om the tenant to th e

successor tenant, a nd did not seek to hold the tenant liable

for any deficien cies in rent. The land lord ’s corporate re presentat ive (see OCGA § 9-11-30 (b) (6) ) testified that the tenant doe s not owe it

any money. A factfinder

could concl

ude from these act ions7

that the landlor

d agreed t o the tenan

t’s surr ender of t

he lease a

nd intended t o terminate the lease. Even if the tenant’s departure w as an abandon ment, afactfinder still could concl

ude that the

landlord opt ed to term

inate the lease , in light of its decision to re-le t the prem

ises witho ut seeking t o recover a defici ency in rent

fro m the tenant. Compare Sirdah v. North Springs Asso cs. , 304 Ga. App. 348, 351 (1) (69 6 SE2d 391) (2010) (where landlord e xpressly told abandon ing tenant t hat it wa s not terminatingleases, and proce eded to sue tenant for brea ch, landlord’ s accepta nce of key from tenant did not show intent to terminate). Notwiths tanding the existe nce of fact questions regarding whether it intended to ter mi nate the lease , the land lord argue s that it is entitled to su mmary j udgmen

t because the lease

permitted it to terminate the tenant’s possession of the prem ises without terminating the lease. But the par agraph to w

hich the landlord points, titled “De fault by Tenant,” a

pplies only

if one of three con ditions is me t: if the tenant fails to pay rent, if i t otherwi se defaults on the lease, o r if it fi les or has f iled again st it certain specifie d proceedings. Wh ether any of these c onditions exi sted in April 2011 is in d ispute. The landlord’s corporate representative testified that the tenant was current on its rent at that tim

e. Altho ugh the landlord a ppears to t ake the position that the tenant’ s departur

e was a b reach of

the lease , there is evi dence t hat the landlord1 We express no opinions reg arding any rig ht s the lende r ma

y have as to replace ment

inventory and any duties that the successor tenant may owe the lender. Those issu es are not b efore us. 8 agreed to the depa

rture. Moreover , the landlord di d not give the tenant noti ce of

any other defaults under

the lea se, as required by the “ Default

by Tenant” paragraph. Fin all y, the landlor

d has not all eged that a

ny of t he procee dings specif

ied in tha t paragra ph hadbeen filed. For these reasons, the record does not show that, as a matter of law, th e landlord was entit led to term

inate the t enant’s possession w ithout terminating the lease. The landlord also argues that it is e ntitled to su mmary j udgm ent becaus e the lender turned dow

n its bela

ted offer for the lender to ass ume th e lease. It is undisputed, however , that the landlord di dnot give thelender the option of en

tering into a new lease in April 2011, and by the time it made its offer in Oct ober 2011 , a third party

– the succe ssor tenant

– had taken

over the business and

sold some of the collateral subject

to the lender’ s security

interest. 1 Moreover, the October 2011 offer

was conditional. Under these circumstances, the trial court did not err in de nying

su mmary j ud gmen t to th e la nd lo rd o n t he b rea ch o f co nt rac t cl aim. 3. Conversion

.9

The landlord argues thatit was entit led to summary judg ment on the le nder’s claim for conve rsion of the

store asse ts in

which i t had a secu rity in teres t. We disagree. A secured creditor such as the lender has the right of

action for conversion

if proper ty subj ect to its s ecurity interest is di spos ed of wi thou t the c redit or’s authoriza tion. The elem ents of such a claim include the showing of a valid security interest in the debt or’s property , dispositi on of thatprop erty, abs ence o f the c redit or’s authoriza tionfor the di sposition, a nd result in g damage to the creditor. An exercise

of dominion or cont

rol over se cured prop erty whi c h is inconsisten

t with the r

ights of the secured party

is convers ion, and thi s law ap plie s to b oth t he bu yer and s eller [of th e coll ateral ]. All Business C

orp. v. C hoi , 280 Ga. App. 618, 622 (2) (63 4 SE2d 400) (2006) (citations and punctuation omitted). We agree tha

t the evide nce does not

show that t

he landl ord i tself exercised dominio n or control over the store assets in which the lender had a secu

rity interest. Itis undisputed that the landlor d was neit her the buy

er nor the sel ler o f th at p rop erty; instead, the tenant sold the property to and received paym ent direct lyfrom

the

successor tenant. A

nd there is no evidence

that the la

ndlo rd acted, as an agen

t, on behalf of the tena

nt, as a pr incipal, in the tran sac tio n. Se e ge ner all y Deere &Co. v.10

Miller-GodleyAuction C o. , 249 Ga. App. 797, 799 (1) (a) (549 SE2d 762) (2001) (an “age nt. . . is liabl e if

he assists i

n a conver sion becaus e he stands in the shoes of his principal”). Neverth eless, th e land lord is not e ntitled to su mmary j udgmen

t on the conversion

claim. The lender also alleged in that clai m that the landlord conspired with others to convert the secured property. A plaintiff m ay recover damages based on civil conspiracy

by show ing that two or more persons com bined either to do some

act whic h is a

tort, or else to do some l awful ac t by methods whic h constitute a tort. T he conspiracy

itself furn ishes no cause of action. T he gist of th e action is not the conspir

acy alleged, b ut the tort co mmitted against the plaintiff and resultant damage. The

essential elem ent of the a

ll eged conspiracy is proof of a

comm on desi gn establis hing that tw o or m ore perso ns in any manne r, ei the r po sit ive ly or taci tly, arrive a t a mutual understa

nding as to how they will accom

plish an unla

wful desi gn. After the conspiracy is form ed, m embe rs of the conspirac y are jointly and severall y liabl e for acts of co -co nsp irat ors don e in furt her anc e of t he c ons pir acy. McIntee v. Der

amus , 313 G a. App. 653, 656 (72 2 SE2d 377) (2012) (c itations an d punctuation

omitt ed). Se e also Parrish v. Jackson W. Jones, P. C. , 278 Ga. App. 645, 649 (3) (629 SE2d 468) (2006). Co mpar e OCGA § 16-4-8 (establishing criminal conspiracy as distinct offense).11

A factfin der could c onclude fr om the evidencein this case

that the landlor

d and either or both the tenant and the s uccessor te nant cons pired to con vert t he len der’s secured property . There is eviden ce that the landlord pr

ocured the

successor

tenant for the specificpurpose of buying th e store a ssets from the tenant

and in fact directed the successor tenant to buy the propert y. T he landlord ’s corp orate re presenta tive admitted that the la

ndlord was “involv[ ed] in getting [the succes sor tenan t] there,” and the em ployee of the land

lord who w as presen

t at the s ale testified that he was there “to m ake sure [the tenant and the s ucce ssor tenan t] agreed on th e invento ry.” This evidencesupports a f inding that th e landlord arrived ata mut ual underst anding with the tenant and

/or the suc cessor te nant as to ho w to dispose of the prop erty in which the lender had asecured interest, without the lender’ s authoriz ation. Acco rdi ngl y, we aff

irm t he denial o f summ

ary j udgmen

t to the land

lord on the

con ver si on cla im. 4. Unjust enrichment. We agree w ith the land

lord, however, that it was entitled to summ ary j udgmen

t

on the lender’s claim f

or unjust enrich ment. “Th e theory of unjust enrichment is basically an equi table doctrine that the benefitted party equitably ought to either return or compensate for

the confe rred bene fits when there w as no legal

contract to12

pay.” Bedsole v. Action Outdoor Advertising JV , 3 25 Ga. App. 194, 200 (3) (75 0 SE2d 445) (2013) (citation and punctuation omitted). The doctrine applies when, as

a matter of fact, there i s no legal contract. Tuvim v. United Jewish Communities , 285 Ga. 632, 635 (2) (680 SE2d 827) (2009) ; Parks v. Thompson B uilders , 296 Ga. App. 704, 706 (3) (67 5 SE2d 583) (2009); Ades v. Werther , 256 Ga. App. 8, 10 (1) (5 67 SE2d 340) (200 2). “Where there is an ex press con tract, t here can b e no recovery basedupon an u njust enric hment theory.” Han v. H an , 295 Ga. App. 1, 4 (3) (a) (670 SE2d 842) (2008) (citation and punctuation omitted). There is no dispute that th e l ender and the landlord had an express, legal contractaddre ssin g the land lord ’s obligations to the lender. Consequently, as a matter of law the r emed y of unj ust enrich

ment i s not availa

ble to the lender, an d it c annot elect that remedy

as an alternative to breach of contract, as it seeks to do. Com pare Ades , 256 Ga. App. at 10 (1) (w here exis tence of c ontract is jury que stio n, pla inti ff’s alternat ive claim for unju st enrichm

ent can sur

vive summar y judgment). The tria l

cou rt e rre d i n d eny in g s ummar y jud gmen t o n t hi s cl aim. 5. Attorney

fees and puni tive dama

ges. The landlord argues that the trial court er red in deny

ing it sum mary judgm ent

on the lender ’s claims for attor ney fe es and punitive dam ages. W e disagre e. The13

land lord ’s argum ent is that these claims fall with the lender’ s primary claims. But as explained above, it

is not entitl ed to summa

ry judgm ent on the br

each of c ontract a

nd conversion

claim s. Case No. A14A0593. 6. Discove ry sanctions

. The lender moved

for the trial court

to strike the landlord’s answer and enter judgm ent again st it becau se so me of the land lord ’s discovery responses were false. The landlord a ckn ow ledged that certain of its initial discovery responses were incorrect and exp l ained that

its error arose out o f the sim

ilarity of the nam

es of the subj ectproperty

and another

of its properties. T

he trial c ourt acce

pte d tha t explanat ion and d enied the motion. We fin d no error . Trial courts have broaddiscretio n in control ling discove ry, including imposi tion of sanctions, and appellate courts will not rever se a trial cour t’s dec ision on such matters unl ess there has been a

clear a buse of disc retion. T

his is because trial judges, through their dire c t involvement with the case, the parties, and the attorney s, and their fa milia rity with the act

ions of the parties in the conduc t of discovery in similar cases tha t are bro ught to their attention, are in the best position to eval uate the parties’ conduct and to det ermine the appro priate lev el of sanct ions.14

Reso urce Life Ins. Co. v. Buckner , 304 Ga. App. 719, 734 (698 SE 2d 19 ) (2010 ) (citation s and punct uationomitt ed). The trial c ourt was a uthorized to accept t

he landlord’ s explanati on . See Ford Motor Co. v. Conley , 294 Ga. 530, 547 (3) (a) (4) (__ SE2d __) ( 2014) (tri al court, through it s direct supervision of discovery proceedin gs, has abi lit y to assess c onduct, de mean or, and c redibility of partie s and their counsel). 7. Motion to str

ike affidav it. The lender al so move d t o stri ke the aff idavit of th e landlord’ s corpora te represe ntative basedon discrepancies between the witne ss’s af

fidavit te stimon

y and his later deposition testimony. The tria l courtdenied themotion , stating t hat she had “given [the affidavit] proper consideration.” We find no err

or. Notwithstanding t

he lender ’s obje ctions to the affidavi t, the trial court wa s authoriz ed to consider the admis sible porti ons of the affi davit in rul ing

on the motion for summary judgment. Vickers v. Chrys ler Credit

Corp. , 158 Ga. A

pp. 434, 440 (4) (28 0 SE2d 8 42) (1981). The record does not show that the trial court abused her discretion in that regard. See Elrod v. Sunflower Meadows Dev. , 322 Ga. App. 666, 669 (2) (745 SE2d 846) (2013) (“We review a trial c ourt’s d ecision on a motion to strike for abuse of discretion.”) (citation omitted).15

Judgment affirmed i

n part and rev ersed in par t in C ase No. A 14A0592; judgment affirmed i

n Case No. A14A0593. Andrews, P. J. , concurs; Ray, J ., conc urs fully in Di

visions 4, 6 and 7, and in the judgment only in D ivisions 1, 2, 3, and 5

.