Court Opinion

ID: 4016393
Source: CourtListenerOpinion
Date Created: 2016-07-18 07:04:09.197444+00
Date Added: 2024-06-11T09:26:36.871262
License: Public Domain

WHOLE COURT

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules

                                                                       July 15, 2016

In the Court of Appeals of Georgia
 A16A0400. THOR GALLERY AT SOUTH DEKALB, LLC v.
     MONGER d/b/a MONGER INVESTMENT GROUP, LLC et
     al.

      BOGGS, Judge.

      Thor Gallery at South DeKalb, LLC (“Thor Gallery”) appeals from an order of

the State Court of DeKalb County that rescinded a commercial lease between Thor

Gallery and Monger Investment Group, LLC and Monger Entertainment Group, Inc.

(collectively “Monger”) and required Thor Gallery to return Monger’s security

deposit. One of Thor Gallery’s arguments on appeal is that the State Court of DeKalb

County lacked jurisdiction to provide Monger with the remedy of equitable

rescission. For the reasons explained below, we agree and therefore vacate the state

court’s order and remand this case with direction that it be transferred to the Superior

Court of DeKalb County.
      The record shows that the lease between the parties required Monger to obtain

specified insurance before the lease commencement date, that the lease would not

commence until Thor Gallery delivered possession to Monger, and that Monger’s

failure to obtain insurance would be considered a default entitling Thor Gallery to

terminate Monger’s right of possession without terminating the lease. When Monger

discovered shortly after the lease was signed that the specified insurance was

unavailable, it requested that Thor Gallery cancel the lease and return its security

deposit. In the alternative, it requested that Thor Gallery revise the insurance

requirements in the lease.

      Thor Gallery refused to alter the insurance requirements and filed suit against

Monger seeking money damages for lost rent even though it had never delivered

possession of the premises to Monger. Monger asserted a counterclaim alleging

impossibility of performance and damages in the amount of the security deposit paid

to Thor Gallery. Both parties filed motions for summary judgment in their favor, and

Monger’s motion asserted that the lease should be rescinded. Following oral

argument, the state court granted Monger’s summary judgment motion and

“rescind[ed] the lease agreement between these parties and [found] that [Monger] was

entitled to the return of the initial payment/security deposit in the amount of

                                         2
$12,197.00.” See OCGA § 13-3-5 (“[i]mpossible, immoral, and illegal conditions are

void and binding upon no one”); Woody’s Steaks v. Pastoria, 261 Ga. App. 815, 819

(2) (584 SE2d 41) (2003) (insurance requirement in lease is condition precedent).

      1. Thor Gallery contends the state court lacked jurisdiction to order rescission

and a return of the security deposit. We agree.

             Georgia’s state courts, created pursuant to OCGA § 15-7-2,
      exercise comprehensive jurisdiction over a wide range of claims,
      including, inter alia, landlord/tenant disputes, misdemeanor offenses
      (including driving under the influence), contract and tort cases, and
      cases involving real property and small claims, but excluding only
      felony criminal cases, certain domestic cases, equity matters, and land
      title cases. See OCGA § 15-7-4, 15-6-8.

(Emphasis supplied.) In re Inquiry Concerning a Judge, 265 Ga. 843, 846-847 (4)

(462 SE2d 728) (1995). State courts, as well as this court, can exercise jurisdiction

over certain cases involving rescission where no affirmative equitable relief is

asserted. See Walsh v. Campbell, 130 Ga. App. 194, 196 (202 SE2d App. 657)

(1973). But that is not the case here because Monger sought affirmative equitable

relief in his motion for rescission. Cf. Goodman v. Little, 96 Ga. App. 110 (99 SE2d

517) (1957) (court without equity jurisdiction cannot address petition praying “for

relief which only a court of equity, or a court of law exercising full equity powers,

                                          3
could administer, such as the rescission of contracts, the cancellation of promissory

notes, injunction, etc.”)

      The dissent cites Brown v. Techdata Corp., 238 Ga. 622 (234 SE2d 787)

(1977), in support of the conclusion that this case involves a rescission at law. But

Brown in fact supports the conclusion that the rescission claim here is equitable in

nature. As Brown explains, “[i]n the rescission ‘at law’ the tender itself effectuates

the rescission” and the purchaser is entitled to the return of the purchase price

“without taking any independent proceeding in equity to rescind the contract.” Id. at

626. “In these instances, the plaintiff rescinds the contract himself by restoring, or

making a bona fide offer to restore, to the defendant the fruits of the contract.” Id.

      In equitable rescission, in contrast, the plaintiff “seeks to invoke the affirmative

powers of a court of equity to rescind, or undo, the contractual transaction.”

(Emphasis supplied.) Id. at 627. As explained in the same treatise on remedies relied

upon by the dissent:

             Rescission in equity is a very different matter. Plaintiffs are
      frequently permitted to resort to equity courts for a rescission without
      much serious concern for the usual rule that equity jurisdiction is based
      upon the inadequacy of a legal remedy. In equity the suit is not on
      rescission, but for rescission; it is not a suit based upon the rescission
      already accomplished by the plaintiff, but a suit to have the court decree

                                           4
      a rescission. . . . Since rescission is not accomplished ‘in equity’ until
      the court so decrees, the plaintiff has no obligation before suit to make
      restitution of goods or money he received from the defendant. . . . [T]he
      judge must act to assure that each party is restored to his pre-contract
      position, at least as far as possible to do.

(Citations and footnotes omitted; emphasis in original.) Dobbs, Handbook on the Law

of Remedies, § 4.8, p. 294 (1973).

      In this case, that is precisely what occurred. Monger asked the court for the

affirmative relief of rescission, the trial court decreed a rescission in its order, and

required Thor Gallery to restore Monger by returning the security deposit. Monger

did not sue on rescission based upon a tender already made. In the lease agreement

at issue, the landlord Thor Gallery agreed to allow the use of its property for 15 years

and the tenant Monger agreed to pay a certain amount of rent each month, with the

amount to increase each year after the third year. But Thor Gallery never delivered

possession of the property, and Monger never paid any rent. Accordingly, there was

nothing for Monger to tender or offer to tender to effectuate a rescission at law.1

      1
          If Monger had received possession of the property, he would have had
something to tender or offer to tender to Thor Gallery to rescind the lease at law. The
fact that Monger had not been given possession of the property distinguishes this case
from a typical landlord/tenant dispute over which a state court generally has
jurisdiction.

                                           5
Rather, Monger sought “the affirmative powers of a court of equity to rescind, or

undo, the contractual transaction.” (Emphasis supplied.) Brown, supra, 238 Ga. at

627. Cf. Regents of the Univ. of System of Ga. v. Carroll, 203 Ga. 292, 293 (1) (b) (46

SE2d 496) (1948) (no equitable rescission where defendants do not seek affirmative

equitable relief, but ask for dismissal with costs, a “purely defensive matter.”) We

must therefore vacate the state court’s order and remand this case with direction that

it be transferred to superior court. See Blackmon v. Tenet Healthsystem Spalding, 284

Ga. 369, 371 (667 SE2d 348) (2008).

      The cases cited by the dissent do not require a different result. Four of the five

cases relied upon do not address the issue of jurisdiction and whether the case

involved legal or equitable rescission. See Medical Staffing Network v. Connors, 313

Ga. App. 645 (722 SE2d 370) (2012); Crowell v. Williams, 273 Ga. App. 676 (615

SE2d 797) (2005); Intl. Sofware Solutions v. Atlanta Pressure Treated Lumber Co.,

194 Ga. App. 441 (390 SE2d 659) (1990); Cutliffe v. Chestnut, 122 Ga. App. 195

(176 SE2d 607) (1970). Instead, they are simply cases in which a magistrate court or

state court addressed a rescission claim below, or rescission is discussed generally.

“Questions which merely lurk in the record, neither brought to the attention of the

court nor ruled upon, are not to be considered as having been decided so as to

                                          6
constitute precedent. [Cit.]” Tolbert v. Whatley, 223 Ga. App. 508, 513 (2) (478 SE2d

587) (1996). And we cannot determine from our opinion in Hann v. Harpers

Boutiques Intl., 284 Ga. App. 531 (644 SE2d 337) (2007), whether any tender was

made or offered in connection with the rescission claim over which the state court had

jurisdiction. Additionally, we stated there that the rescission claim at issue was based

upon fraudulent inducement that is “legal in nature and not equitable.” Id. at 533 (2).

This case does not involve a rescission based upon fraudulent inducement.

      Additionally, the fact that Monger cited a statute, OCGA § 13-4-62,2 in support

of his rescission claim does not automatically render it a claim “at law.” Indeed, the

Georgia Supreme Court has recognized that the restoration contemplated by the

predecessor of this statute is equitable in nature. Jones v. Gaskins, 248 Ga. 510, 512

(1) (284 SE2d 398) (1981). See also Lanier Home Center v. Underwood, 252 Ga.

App. 745, 746 (1) (557 SE2d 76) (2001) (“Georgia law allows equitable rescission

for nonperformance of a contract: ‘A party may rescind a contract without the consent

of the opposite party on the ground of nonperformance by that party but only when

      2
        This Code section provides: “A party may rescind a contract without the
consent of the opposite party on the ground of nonperformance by that party but only
when both parties can be restored to the condition in which they were before the
contract was made.”

                                           7
both parties can be restored to the condition in which they were before the contract

was made.’ OCGA § 13-4-62. [Cit.]”).

      2. Thor Gallery’s remaining enumerations of error are rendered moot by our

holding in Division 1.

      Judgment vacated and case remanded with direction. Phipps. P. J., Dillard,

Branch, McMillian, Mercier and Peterson, JJ., concur. Ellington, P. J., concurs in

the judgment only. McFadden, J., dissents.

                                         8
 A16A0400. THOR GALLERY AT SOUTH DEKALB, LLC v.
     MONGER d/b/a MONGER INVESTMENT GROUP, LLC et
     al.

      MCFADDEN, Judge, dissenting.

      I respectfully dissent. The trial court had jurisdiction to rule in this action. So

I would decide the merits.

      As detailed below, I would affirm the trial court’s denial of summary judgment

to Thor Gallery on both Thor Gallery’s claims and Monger’s counterclaim. I also

would affirm the trial court’s grant of summary judgment to Monger on Thor

Gallery’s claims. Because a factual issue exists as to whether Monger was entitled to
rescind the contract and recover its security deposit, however, I would reverse the

trial court’s grant of summary judgment to Monger3 on its counterclaim.

      1. Trial court’s jurisdiction.

      The majority correctly states that state courts do not have jurisdiction over

cases in equity. But not every case involving rescission of a contract is a case in

equity. “[A]n instrument may be voided in an action at law.” Walsh v. Campbell, 130

Ga. App. 194, 196 (202 SE2d 657) (1973). As our Supreme Court described in Brown

v. Techdata Corp., 238 Ga. 233, 626-627 (234 SE2d 787) (1977), two types of

rescission are available to parties to a contract: rescission in equity and rescission at

law. And if a contract is rescinded at law, a party may seek in an action at law to

recover the property which has been retained by the other party under the rescinded

contract, Brown, 238 Ga. at 626-627, even though, as the majority states, the right to

restoration of one’s property under a rescinded contract is an equitable right. See

Jones v. Gaskins, 248 Ga. 510, 512 (1) (284 SE2d 398) (1981). See generally Dobbs,

Remedies, § 4.3, p. 255 (1973) (where rescission at law is accomplished by the

      3
         For convenience, in this dissent I treat the appellees as a single party and
adopt the majority’s collective use of the term “Monger” to describe them. I note that
Thor Gallery brought this action against three defendants: the two entities that entered
into the lease and an individual, Sampson Monger, who signed a personal guaranty
of the lease.

                                           2
unilateral act of the plaintiff, that party must then bring suit to obtain restitution of his

money, but “[i]n such a case there is no need for equity intervention[.]”). State courts

have jurisdiction to entertain rescission claims that are legal in nature. Hann v.

Harpers Boutiques Intl., 284 Ga. App. 531, 533 (2) (644 SE2d 337) (2007). See

generally Medical Staffing Network v. Connors, 313 Ga. App. 645, 650-651 (3) (722

SE2d 370) (2012) (affirming state court decision that included finding that party had

rescinded contract due to other parties’ nonperformance); Crowell v. Williams, 273

Ga. App. 676, 677-678 (3) (615 SE2d 797) (2005) (reversing state court decision that

denied plaintiff’s attempt to recover money paid under contract that defendant had

effectively rescinded due to plaintiff’s nonperformance); Intl. Software Solutions v.

Atlanta Pressure Treated Lumber Co., 194 Ga. App. 441, 443 (390 SE2d 659) (1990)

(affirming state court’s conclusion that plaintiff was entitled to rescission, for

nonperformance, of contract and refund of money paid to defendant for computer

system, conditioned upon plaintiff’s return of computer system to defendant).

       Accordingly, the question of the state court’s jurisdiction in this case turns on

whether the contract was rescinded at law or in equity. A rescission at law occurs by

the action of a party to the contract, typically by the tender of contractual benefits.

See Brown, 238 Ga. at 626 (“[i]n the rescission ‘at law’ the tender itself effectuates

                                             3
the rescission); see also Jesinoski v. Countrywide Home Loans, __ U. S. __, __ (135

SCt 790, 190 LE2d 650) (2015) (in rescission at law, party to contract effects

rescission by returning what he received under contract); Sherzer v. Homestar Mtg.

Svcs., 707 F3d 255, 261 (3d Cir. 2013) (rescission at law “occurs automatically when

parties have taken [a] requisite action”) (citation omitted). See generally Dobbs,

Remedies, § 4.3, p. 255 (1973) (in a rescission at law, “the plaintiff may unilaterally

rescind against the will of the defendant, assuming the plaintiff has good substantive

grounds for doing so”). In contrast, a rescission in equity requires the action of a court

to undo the contractual transaction. Brown, 238 Ga. at 627; see also Jesinoski, __ U.

S. at __; Sherzer, 707 F3d at 261. See generally Dobbs, Remedies § 4.8, pp. 292-294

(1973) (discussing role of court in rescission at law versus rescission in equity).

      In its counterclaim and motion for summary judgment, Monger sought to

rescind the lease for Thor Gallery’s nonperformance under OCGA § 13-4-62, which

permits a party to take action to rescind a contract. That Code section provides that

“[a] party may rescind a contract without the consent of the opposite party on the

ground of nonperformance by that party but only when both parties can be restored

to the condition in which they were before the contract was made.” OCGA § 13-4-62

(emphasis supplied.) The record shows that both parties could be restored to the

                                            4
condition in which they were before the contract was made. And a party may invoke

its right to rescind under this Code section in a court proceeding. See Intl. Software

Solutions, 194 Ga. App. 441, 442 (390 SE2d 659) (1990).

       Nevertheless, as the majority points out, Monger made no tender to Thor

Gallery of benefits that it had received under the contract. It was impossible for

Monger to make a tender of benefits such as money or possession of the premises to

Thor Gallery, because Thor Gallery had not given any such benefits to Monger under

the lease. By opting to rescind rather than seek to recover under the lease, however,

Monger did relinquish its ability to hold Thor Gallery to its obligations thereunder.

Moreover, we have held that, “[w]here money is paid on a contract which is

executory on the party of him who receives the money, and the party so receiving

fails to fulfill his part of the contract, the injured party may elect either to bring action

on the contract and recover damages for nonperformance, or to consider the contract

as rescinded and recover the money paid.” Cutcliffe, 122 Ga. App. at 202 (2) (citation

and punctuation omitted; emphasis supplied). And our courts have recognized

exceptions to the requirement that a party offer restoration in order to rescind a

contract under OCGA § 13-4-62 “where nothing of any value is received by the party

seeking to rescind” or “where the amount received under the contract sought to be

                                             5
rescinded may be less than the amount actually due the party seeking to rescind.”

2010-1 SFG Venture LLC v. Lee Bank & Trust Co., 332 Ga. App. 894, 905 (3) (a)

(775 SE2d 243) (2015) (citation omitted). A rescission may be at law even though

tender is not possible for one of these reasons. See Dobbs, Remedies § 4.8, p. 295

(1973).

      The majority cites Walsh v. Campbell, supra, 130 Ga. App. 194, for the

proposition that state courts “can exercise jurisdiction over certain cases involving

rescission where no affirmative equitable relief is asserted.” The Walsh decision does

not hold, however, that a case is one in equity rather than at law simply because the

plaintiff seeks to recover property retained by the other party under a rescinded

contract. Such a holding would conflict with our Supreme Court’s holding in Brown.

See Brown, 238 Ga. at 626.

      For these reasons, Monger’s rescission of the lease for nonperformance under

OCGA § 13-4-62 was a rescission at law. Consequently, the trial court had

jurisdiction over this case and we must address the merits of Thor Gallery’s appeal

from the state court’s ruling.

      2. Summary judgment.

                                          6
      In her order, the trial court denied Thor Gallery’s motion for summary

judgment (which had addressed both Thor Gallery’s claims and Monger’s

counterclaim), granted Monger’s motion for summary judgment (which had also

addressed both parties’ claims ), held that the lease was rescinded, and ordered Thor

Gallery to return Monger’s security deposit. Summary judgment is appropriate where

“the pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue of material fact

and that the moving party is entitled to judgment as a matter of law[.]” OCGA § 9-11-

56 (c). “On a motion for summary judgment the plaintiff [or counterclaim plaintiff],

as movant, has the burden of establishing the absence or non-existence of any defense

raised by the defendant [or counterclaim defendant].” Greenstein v. Bank of the

Ozarks, 326 Ga. App. 648, 649 (1) (757 SE2d 254) (2014) (citation and punctuation

omitted). This court “review[s] a grant or denial of summary judgment de novo and

construe[s] the evidence in the light most favorable to the nonmovant. Because this

[dissent] addresses cross-motions for summary judgment, [I] will construe the facts

in favor of the nonmoving party as appropriate.” Krieger v. Bonds, 333 Ga. App. 19,

20 (775 SE2d 264) (2015) (citation and punctuation omitted).

      (a) Thor Gallery’s claims.

                                            7
       In its action against Monger, Thor Gallery alleged that Monger breached the

lease by failing to take possession of the premises and failing to pay rent as it became

due, and it alleged that individual defendant Sampson Monger breached a personal

guaranty to pay Monger’s rent. The trial court denied Thor Gallery’s motion for

summary judgment and granted Monger’s motion for summary judgment on these

claims. I find no error, because the evidence shows that Thor Gallery did not comply

with the lease requirement that it provide Monger with notice of and an opportunity

to cure any defaults.

       The lease pertinently provides that Monger’s failure to make a rent payment or

to observe or perform any other term or condition of the lease constitutes a default

and permits Thor Gallery to seek remedies under the lease, unless such failure is

cured within a specified period “after [Thor Gallery] has sent notice of such failure

to [Monger.]” The lease requires that “every notice or demand given by either party

to the other . . . shall be in writing and . . . shall be served personally or by a courier

service that provides a signed delivery receipt, or United States registered or certified

mail, return receipt requested, postage prepaid, addressed, if to [t]enant, at the address

first set forth in this [l]ease[.]” To the extent the requirements of these provisions are

                                            8
ambiguous, they must be construed against the drafter, Thor Gallery. Zions First Nat.

Bank v. Macke, 316 Ga. App. 744, 753 (4) (a) (730 SE2d 462) (2012).

      The record contains two letters that Thor Gallery sent by certified mail to

Monger. First, a March 19, 2014 letter instructed Monger to “take notice” of three

things: (1) that possession of the premises was ready to be delivered to Monger but

that such delivery had been delayed because Thor Gallery had not received from

Monger certain insurance policies required under the lease; (2) that Thor Gallery

could not continue to delay the commencement of the lease while waiting to receive

the insurance policies, and therefore deemed the “Lease Commencement Date,” as

defined in the lease, to be March 19, 2014; and (3) that if Monger “continue[s] to fail

to comply with the [l]ease as described above, [Monger] will be in default of the

[l]ease and [Thor Gallery] will seek all applicable remedies under the [l]ease.”

(Emphasis supplied.) Notably, this letter identified Monger’s noncompliance as a

failure to provide insurance policies, not as a failure to take possession of the

premises or a failure to pay rent. Moreover, the letter expressly stated that Monger

“will be” in default if it continued to fail to comply with the insurance policy

requirement, implying that at the time Monger was not in default. The March 19,

2014 letter was not sufficiently specific to constitute notice under the lease of Thor

                                          9
Gallery’s claim that Monger defaulted by failing to take possession of the premises

and failing to make rent payments.

      Second, a July 11, 2014 letter purported to notify Monger that it was in default

for failing to provide Thor Gallery with insurance policies and failing to pay rent as

it became due and payable. This letter also failed to provide notice of the specific

breaches upon which Thor Gallery bases this action. As with the earlier letter, this

letter identified Monger’s noncompliance as a failure to provide insurance policies,

not as a failure to take possession of the premises, and the ambiguity arising from this

lack of precision must be construed against Thor Gallery. See Zions, 316 Ga. App.

at 753 (4) (a). While the letter did identify Monger’s failure to pay rent as a ground

for default, in fact at that time Monger was not in breach of any provisions regarding

rent payment, as Thor Gallery subsequently conceded, because Monger’s obligation

to pay rent under the lease had not yet begun.

      Because there is no evidence that Thor Gallery provided Monger with notice

of and an opportunity to cure the breaches it alleges in its complaint, as required by

the lease, the trial court did not err in denying summary judgment to Thor Gallery and

granting summary judgment to Monger on Thor Gallery’s breach of contract and

breach of guaranty claims. See Zions First Nat. Bank, 316 Ga. App. at 753 (4) (a)

                                          10
(holding that party must comply with notice and cure provisions before seeking

remedy for default under contract).

      (b) Monger’s counterclaim.

      In its counterclaim, among other things, Monger alleged that Thor Gallery had

not performed obligations under the lease and asked to recover its security deposit.

In its summary judgment motion, Monger argued that it was entitled to this remedy

under OCGA § 13-4-62, which permits a party to a contract to “rescind the contract

without the consent of the opposite party on the ground of nonperformance by that

party but only when both parties can be restored to the condition in which they were

before the contract was made.” However, “Georgia courts have refused to allow

rescission when a [party seeking rescission] has materially breached the contract or

when [that party’s] nonperformance justified [the other party’s] subsequent

nonperformance[.]” Martin v. Rollins, Inc., 238 Ga. 119, 120 (1) (231 SE2d 751)

(1977) (citations omitted). As detailed below, there exist genuine issues of material

fact about whether both Thor Gallery and Monger failed to perform under the lease.

These facts preclude summary judgment to either party on Monger’s counterclaim.

Accordingly, the trial court correctly denied summary judgment to Thor Gallery on

the counterclaim but erred in granting summary judgment to Monger.

                                         11
      (i) Thor Gallery’s alleged nonperformance. Monger argues that Thor Gallery

failed to perform under the lease because it did not give Monger notice of and

opportunity to cure defaults and because it charged Monger rent but did not deliver

possession of the premises.

      As to notice (as discussed above in Division 2 (a) of this dissent), the evidence

shows that Thor Gallery did not provide Monger with the required notice of and

opportunity to cure the alleged defaults. While this nonperformance precluded Thor

Gallery’s claims against Monger, it did not authorize Monger to rescind the lease

under OCGA § 13-4-62 because the nonperformance was not “so substantial and

fundamental as to defeat the object of the contract.” Yi v. Li, 313 Ga. App. 273, 277

(721 SE2d 144) (2011) (citation and punctuation omitted).

      As to delivery of possession of the premises, Thor Gallery argues that it was

excused from this obligation because Monger did not obtain the insurance coverage

required under the lease. The lease provisions relevant to these arguments provided:

(1) that Thor Gallery could begin charging rent the earlier of the date Monger opened

for business to the public or 150 days after the “Lease Commencement Date”; (2) that

the “Lease Commencement Date” occurred when possession of the premises was

delivered to Monger; (3) that Monger “shall deliver” to Thor Gallery certain

                                         12
documents pertaining to insurance “prior to the [‘]Lease Commencement Date[‘]”;

and (4) that Thor Gallery could invoke the “Lease Commencement Date” while

delaying delivery of possession of the premises if the delay arose “from the acts or

omissions of [Monger] or of any person or entity acting on behalf of, or at the

direction of, [Monger].”

      I am not convinced by Thor Gallery’s argument that these provisions

established Monger’s delivery of the insurance documents as a condition precedent

to Thor Gallery’s delivery of the premises. Compare Yi, 313 Ga. App. at 277

(provision expressly conditioning closing in purchase of ice cream store franchise

upon obtaining franchisor’s consent was a condition precedent to the transaction). To

the extent delivery of the insurance documents was a condition precedent to anything,

it was a condition precedent to the “Lease Commencement Date,” which under the

lease was usually but not always the same date as the date of delivery of possession

of the premises. And Thor Gallery waived that condition precedent when it deemed

the “Lease Commencement Date” to be March 19, 2014, even though it had not

received the insurance documents. (See discussion of March 19, 2014 letter in

Division 2 (a) of this dissent.) See Dental One Assoc. v. JKR Realty Assoc., 269 Ga.

616, 618 (2) (501 SE2d 497) (1998) (party can waive condition precedent).

                                         13
      Nevertheless, the above referenced lease provisions, taken together, permitted

Thor Gallery to invoke the “Lease Commencement Date” and charge Monger rent

despite failing to deliver possession of the premises to Monger if the failure to deliver

possession of the premises arose from Monger’s acts or omissions. And a fact

question exists as to whether Thor Gallery’s failure to deliver possession of the

premises arose from Monger’s acts or omissions. Thor Gallery has presented evidence

that it did not deliver possession of the premises to Monger because Monger had not

obtained the insurance required by the lease. Monger has presented evidence that

such insurance was unavailable, but it offers no explanation as to why the insurance

was unavailable. The evidence does not reveal whether or not the insurance was

unavailable due to some act or omission of Monger. Consequently, Monger has not

met its burden, as counterclaim plaintiff, of showing that there is evidence demanding

a judgment that Thor Gallery failed to perform an obligation to deliver possession of

the premises.

      (ii) Monger’s alleged nonperformance. Even if Thor Gallery did not perform

its obligation to deliver possession of the premises under the lease, Monger cannot

recover under OCGA § 13-4-62 if Monger also materially breached the lease or acted

in a way that justified Thor Gallery’s nonperformance. See Martin, 238 Ga. at 120

                                           14
(1). Thor Gallery argues that Monger did not perform its obligations under the lease

to obtain insurance and to provide Thor Gallery with certain construction permits,

plans, and specifications. Monger has presented evidence that it could not satisfy

these obligations because the required insurance was unavailable (the fact of which

Monger informed Thor Gallery before Thor Gallery signed the lease) and because,

without possession of the premises, it could not procure the required construction

documents. Fact questions remain as to whether this unavailability rendered

performance of the condition impossible such that the condition was void under

OCGA § 13-3-5. Additionally, whether Monger’s failure to obtain insurance and

construction documents under the circumstances “was such a material breach of the

[lease] so as to bar rescission depends on the resolution . . . of issues of fact

concerning the causes and nature of the [failure], and its contribution, if any, to the

alleged breach of [Thor Gallery].” Martin, 238 Ga. at 121 (1). Accordingly, neither

party is entitled to summary judgment on the counterclaim.

                                          15