IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2015-CA-00882-COA
110 SOUTH STREET, LLC APPELLANT/CROSS-
APPELLEE
v.
ATRIUM GENTLEMANS CLUB, INC. APPELLEE/CROSS-
APPELLANT
DATE OF JUDGMENT: 04/09/2015
TRIAL JUDGE: HON. J. DEWAYNE THOMAS
COURT FROM WHICH APPEALED: HINDS COUNTY CHANCERY COURT,
FIRST JUDICIAL DISTRICT
ATTORNEYS FOR APPELLANT: JEFFREY DALE RAWLINGS
JON JERDONE MIMS
ATTORNEY FOR APPELLEE: MEL J. BREEDEN JR.
NATURE OF THE CASE: CIVIL - REAL PROPERTY
TRIAL COURT DISPOSITION: AWARDED APPELLANT $9,800 IN BACK
RENT AND A LIEN AGAINST APPELLEE’S
PERSONAL PROPERTY LOCATED AT 110
SOUTH STREET
DISPOSITION: AFFIRMED - 02/21/2017
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
CARLTON, J., FOR THE COURT:
¶1. 110 South Street LLC filed a complaint in the Hinds County Chancery Court seeking
damages against Atrium Gentleman’s Club Inc. (Atrium) after Atrium failed to make lease
payments. After a hearing on the matter, the chancellor entered an order finding that Atrium
owed 110 South Street $9,800 in back rent. The chancellor’s order reflected that the parties
orally agreed that Atrium would rent the property at a rate of $3,500 per month and would
take possession of the property on April 1, 2014. The chancellor found that no enforceable
written lease agreement existed between the parties since “no such document was ever signed
by both parties.” The chancellor also held that each party would be responsible for its own
attorney fees.
¶2. Atrium filed a motion for reconsideration, which the chancellor denied. 110 South
Street now appeals the chancellor’s order and argues that the chancellor erred by failing to
award attorney fees and additional damages. Atrium cross-appeals, asserting that the
chancellor erred in: (1) finding that the rental period commenced on April 1, 2014; (2)
granting a lien on Atrium’s personal property; and (3) failing to order that 110 South Street
return Atrium’s property. Finding no error, we affirm the chancellor’s order and judgment.
FACTS
¶3. In March 2014, Ray Mallard, an agent for Atrium, contacted 110 South Street to
inquire about securing a lease agreement for the property. After negotiations, the parties
agreed that Atrium would pay $3,500 per month to lease the property, and Atrium would take
possession of the property on April 1, 2014. However, the record reflects that Atrium never
signed or executed the proposed lease agreement.1 Both Atrium and 110 South Street
testified that the parties agreed that Atrium could occupy the property for forty-five days
rent-free while Atrium made some needed renovations to the property. The parties also both
testified that they agreed to extend this rent-free period for an additional forty-five days due
1
Atrium asserts, and testimony reflects, that it never signed the lease since the terms
failed to comply with the agreement of the parties. The record reflects that neither Atrium
nor 110 South Street signed the lease agreement.
2
to renovation delays, totaling ninety days in all.
¶4. On August 21, 2014, after Atrium failed to make lease payments, 110 South Street
filed a complaint for a temporary restraining order (TRO), an injunction, and other relief
against Atrium, seeking damages, all sums due, injunctive relief, and attorney fees based on
the following: 110 South Street’s statutory landlord’s lien; Atrium’s failure to pay past-due
rent, expenses, and costs; Atrium’s failure to provide proof of insurance; Atrium’s failure to
transfer utilities; and Atrium’s failure to execute a written lease agreement.
¶5. On August 27, 2014, the chancellor entered a TRO enjoining and prohibiting Atrium
from removing any property from the premises and from entering and accessing the premises.
The hearing for the preliminary injunction was set for September 8, 2014. When Atrium
failed to respond and attend the hearing, the chancellor entered a permanent injunction on
October 3, 2014. On the same day, Atrium and 110 South Street executed a forbearance
agreement that allowed Atrium to remain open briefly in exchange for Atrium’s agreement
that it would have no defenses to the prior action filed against it by 110 South Street.
¶6. On October 15, 2014, the chancellor entered an entry of default against Atrium.
Atrium filed its answer and motion to set aside the entry of default and permanent injunction
on October 16, 2014. The chancellor entered an order on February 18, 2015, finding that the
only remaining issues to be determined were: (1) the amount, if any, due to 110 South Street,
(2) the items, if any, to which the landlord’s lien attached, and (3) the items, if any, to which
Atrium was entitled.
¶7. The chancellor held an evidentiary hearing on these issues on March 18, 2015. At the
3
hearing, 110 South Street asserted that Atrium owed it approximately $18,000, which
included $3,000 in attorney fees. 110 South Street based this amount on unpaid rent and
Atrium’s failure to cover costs to improve the building, which included contracted electrical
and roofing work, and installation of the sprinkler system. 110 South Street submitted that
it also incurred expenses for the electric bills and $3,000 in losses for a metal-clad fireproof
door that was removed from the building. 110 South Street also requested its security deposit
for damages, and all of its damages for rent for April, May, June, July, August, and
September, in addition to a lien on certain personal property.
¶8. However, at the hearing, 110 South Street testified that although Atrium was
scheduled to take possession of the property on April 1, 2014, 110 South Street agreed to
provide a ninety-day rent-free period to Atrium due to renovations being made to the
property. 110 South Street agreed that it was not entitled to receive rent from Atrium until
June 15, 2014.
¶9. 110 South Street also asserted that when it obtained possession of the property through
the injunctive action, the contents in the premises consisted of furniture, kitchen equipment,
bar equipment, sound and light equipment, stages, stripper poles, and televisions. The stages
were permanently mounted to the concrete floors. 110 South Street sought to establish its
lien against the personal property, primarily against the kitchen equipment, explaining that
none of the personal property other than the kitchen equipment had any real value to 110
South Street.
¶10. At the hearing, Atrium also acknowledged that the parties agreed that Atrium could
4
occupy the property starting on April 1, 2014, but Atrium testified that the parties agreed that
Atrium would not pay rent for a forty-five-day period so that it could make the renovations
needed for its business. At the end of the initial forty-five-day period, Atrium stated that
renovations were still ongoing; as a result, Atrium testified that the parties agreed to extend
the rent-free period for an additional forty-five days. Atrium testified that this rent-free
period ended on June 15, 2014, when the gentleman’s club opened for business.
¶11. Atrium further testified that prior to opening for business, 110 South Street requested
Specialty Electric to perform some work on the building. Atrium claimed that it never
received a bill from 110 South Street for any work performed by Specialty Electric, and
Atrium stated that it was never presented a bill for a fire inspection. Atrium also testified that
leaks in the roof were corrected without an agreement between the parties as to who would
pay for these repairs. Atrium submitted that it paid the Entergy electric bills during the
renovations to the building, even though the electricity account remained in 110 South
Street’s name. Regarding 110 South Street’s claim about the metal-clad fireproof door,
Atrium testified that 110 South Street ordered that the door be placed outside of the premises,
where it later disappeared.
¶12. Both parties testified and agreed that Atrium had indeed paid 110 South Street a total
of $14,700. However, despite its prior testimony that the rent-free period ended on June 15,
2014, 110 South Street still claimed that Atrium owed them “[f]or April, May, June, July,
August, [and] September, [and for] the $3,000 missing door that [Atrium] couldn’t tell
[them] why [they] couldn’t put back in place.” 110 South Street also disputed that Atrium
5
should receive dollar-for-dollar credit on the $3,500 security deposit.
¶13. The chancellor entered his opinion and order on April 9, 2015, awarding a judgment
against Atrium, and in favor of 110 South Street, in the amount of $9,800 in back rent. The
chancellor found that the parties agreed that Atrium would rent the property from 110 South
Street at a rate “of $3,500 per month from April 1, 2014, until the date upon which Atrium
was removed from the premises, being October 3, 2014, for a total of $24,500.” The
chancellor acknowledged that Atrium had paid a total of $14,700 to 110 South Street in rent,
and held Atrium liable for remaining unpaid rent in the amount of $9,800. The chancellor
ordered Atrium to pay this amount within twenty days.
¶14. The chancellor found that although Atrium took possession of the property on April
1, 2014, Atrium failed to sign the lease agreement. As a result, the chancellor found that no
enforceable lease agreement existed between the parties. The chancellor granted 110 South
Street a lien against Atrium’s personal property, but the chancellor explained that the lien
would be extinguished, and Atrium could recover all personal property from the location
listed on “exhibit B,” if Atrium paid the monetary judgment in full within twenty days. The
chancellor also held that any property considered a fixture would not be recoverable by
Atrium, and that each party would be responsible for its own attorney fees.
¶15. On April 17, 2015, Atrium filed a motion for a new trial, reconsideration, or to set
aside the judgment. On May 13, 2015, the chancellor entered an order denying Atrium’s
motion. 110 South Street filed its appeal on June 5, 2015, and Atrium subsequently filed its
6
cross-appeal.2
STANDARD OF REVIEW
¶16. This Court employs a limited standard of review when reviewing a chancellor’s
decisions. McNeil v. Hester, 753 So. 2d 1057, 1063 (¶21) (Miss. 2000). This Court
“review[s] a chancellor’s decision for abuse of discretion[,] . . . [and we] will affirm a
chancellor’s decision when it is supported by substantial credible evidence.” Venture Sales
LLC v. Perkins, 86 So. 3d 910, 913 (¶11) (Miss. 2012) (citations omitted). We only disturb
the chancellor’s findings if “they are manifestly wrong or clearly erroneous, or the chancellor
applied an erroneous legal standard.” Ainsworth v. Ainsworth, 139 So. 3d 761, 762 (¶3)
(Miss. Ct. App. 2014). However, we review a chancellor’s conclusions of law de novo.
Lowrey v. Lowrey, 25 So. 3d 274, 285 (¶26) (Miss. 2009).
DISCUSSION
I. Appeal by 110 South Street
¶17. The chancellor ordered each party to be responsible for its own attorney fees, and like
Judge Wilson’s separate opinion, we find no abuse of discretion by the chancellor in denying
110 South Street’s request for attorney fees herein. See Jordan v. Fountain, 986 So. 2d 1018,
1021 (¶7) (Miss. Ct. App. 2008). 110 South Street argues that the chancellor erred in failing
to award it damages and attorney fees. 110 South Street submits that the chancellor limited
110 South Street’s damages to the total amount of rent owed by Atrium subtracted by the
2
The record reflects that on June 3, 2015, Atrium filed a motion for relief from
judgment and for reconsideration of its previous motion for a new trial, for reconsideration,
or to set aside of the judgment. No order or judgment responding to this motion appears in
the record before us.
7
amount already paid by Atrium, amounting to a total of $9,800. 110 South Street argues that
based on the forbearance agreement and the presentation at the hearing of the damages
incurred by 110 South Street, the chancellor should have awarded 110 South Street actual
damages in the amount of $18,512.33, which includes attorney fees of approximately $2,500.
¶18. The record reflects that on October 3, 2014, Atrium executed the forbearance
agreement wherein Atrium agreed that “it has no defenses to the action filed against it by 110
South Street, LLC,” in exchange for 110 South Street allowing a forbearance of the
permanent injunction. 110 South Street argues that the chancellor erred in failing to award
it damages and attorney fees because, as a matter of contract, Atrium agreed by execution of
the forbearance agreement that it possessed no defenses to 110 South Street’s complaint. As
a result, 110 South Street argues that Atrium was contractually estopped from defending
against its liability as to 110 South Street’s request for damages and attorney fees, and
estopped from arguing that the terms of the lease agreement were not enforceable based on
the fact that the lease was never signed and executed.
¶19. Upon review, the record reflects that the forbearance agreement provides , in pertinent
part, that:
110 South Street, LLC has agreed to forbear from enforcing the
Permanent Injunction until October 4, 2014[,] at 5:00 a.m. under certain terms
and conditions. In consideration for this agreement, Atrium . . . has agreed to
the following terms and conditions.
Atrium . . . agrees that it has no defenses to the action
filed against it by 110 South Street . . . and agrees that the
Permanent Injunction is valid and enforceable in all respects and
that 110 South Street . . . is entitled to immediate possession of
the subject premises.
8
However, the forbearance agreement failed to provide for an award of attorney fees or an
award for any special damages. “[A]ttorney[] fees are a special remedy available only when
expressly provided for in either a statute or contract, or when there is sufficient proof to
award punitive damages.” Falkner v. Stubbs, 121 So. 3d 899, 903 (¶15) (Miss. 2013). A
forbearance agreement constitutes a collateral agreement that must be independently binding
in its terms. See generally Sunburst Bank v. Keith, 648 So. 2d 1147, 1151 (Miss. 1995);
Graham v. Pepple, 132 Miss. 612, 612, 97 So. 180, 184 (1923).
¶20. At the hearing, Patrick Pigott, the owner of 110 South Street, identified an expense
sheet for 110 South Street, which was admitted into evidence.3 Pigott testified that the
expense sheet reflected that Atrium owed 110 South Street $15,987.33. Counsel for 110
South Street asked Pigott how he arrived at that sum, and Pigott explained:
Well, the contracted work that they agreed to pay for initially to improve the
building, we just—I hired my electrician, my roofer and my fire sprinkler guy
to do the work that they needed done to the building that they agreed to pay
for. That’s three of the amounts here. There’s a total of five. And then we
paid—they didn’t pay the power bill; we paid the power bill. It was in our
name for a while. And then there’s unpaid rent, late fees on the unpaid rent,
attorney[] fees and court costs, which here is not accurate. One charge is for
a metal-clad fireproof door that was in the building, that was removed from the
building.
¶21. Pigott also testified that he applied Atrium’s $3,500 security deposit “toward the three
months’ worth of rent that they got for free during the construction period.” When asked the
total outstanding balance owed by Atrium at the time of the hearing, Pigott responded that
Atrium owed $18,512.33, which included an additional sum of between $2,500 and $3,000
3
This expense report does not appear in the record before us.
9
for attorney fees. Counsel for 110 South Street admitted that Atrium paid 110 South Street
a total of $14,700, although Atrium paid this amount after 110 South Street filed the lawsuit.
¶22. The record reflects that Deetra Jones Eiland, owner of Atrium, testified concerning
the lack of an agreement between the parties to the terms of the proposed lease, the
agreements, or the lack thereof, as to the work and repairs to be done to the building, as well
as the disagreement regarding the payment of the electricity bill and rent.
¶23. The transcript, especially Pigott’s testimony, and record before us, reflect that the
$18,512.33 in damages and attorney fees requested by 110 South Street includes unpaid rent.
The record also reflects that both parties agreed that Atrium paid a total of $14,700 to 110
South Street in unpaid rent. Since the expense sheet does not appear in the record before us,
we cannot determine the total amount in damages, minus the unpaid rent, 110 South Street
seeks on appeal.
¶24. However, upon our review, we recognize that “[t]he question that we must answer
when reviewing a chancellor’s damage award is not merely whether we would have awarded
more or less damages; rather, our inquiry on appeal is whether there is substantial evidence
to support the chancellor’s findings.” Indus. & Mech. Contractors of Memphis Inc. v. Tim
Mote Plumbing LLC, 962 So. 2d 632, 636 (¶10) (Miss. Ct. App. 2007) (citing Edge v. City
of Booneville, 226 Miss. 108, 109, 83 So. 2d 801, 802 (1955)). Our supreme court has held
that “[i]n the context of a damages assessment, which is a finding of fact, the appellate court
must review the damages award by looking to the facts of each case.” Lane v. Lampkin, 175
So. 3d 1222, 1227 (¶7) (Miss. 2015) (internal quotation marks omitted). As stated
10
previously, this Court “will not disturb the factual findings of a chancellor when supported
by substantial evidence unless we can say with reasonable certainty that the chancellor
abused his discretion, was manifestly wrong [or] clearly erroneous, or applied an erroneous
legal standard.” Id. at (¶6).
¶25. Our review of the record reflects that the chancellor herein found that the lease
agreement was not executed, and as a result, no enforceable written lease agreement existed
between the parties. Based on the testimony presented at the hearing, the chancellor did find
that “the parties agreed that Atrium would rent the subject property from 110 [South Street]
at a rate of $3,500 per month with Atrium taking possession of the property effective April
1, 2014.” The chancellor calculated the rent owed to 110 South Street from April 1, 2014,
until October 3, 2014, which totaled $24,500. The chancellor subtracted Atrium’s rent
payment to 110 South Street of $14,700, and found that Atrium still owed 110 South Street
$9,800. The chancellor also granted 110 South Street a lien on Atrium’s personal property
currently left on the property, explaining that the lien would be extinguished, and Atrium
could recover all personal property from the location listed on “exhibit B,” except for the
fixtures, if Atrium paid the monetary judgment in full within twenty days.
¶26. The chancellor also ordered that each party would be responsible for its own attorney
fees. We recognize that “the standard of review regarding attorney[] fees is the abuse of
discretion standard.” Jordan v. Fountain, 986 So. 2d 1018, 1021 (¶7) (Miss. Ct. App. 2008).
The Mississippi Supreme Court has found no basis for an award of attorney fees for breach
of an oral agreement. Falkner, 121 So. 3d at 903 (¶¶12, 15). As stated, “attorney[] fees are
11
a special remedy available only when expressly provided for in either a statute or contract,
or when there is sufficient proof to award punitive damages.” Id.;4 see also Miss. Power &
Light Co. v. Cook, 832 So. 2d 474, 486 (¶40) (Miss. 2002). After our review of the record
and the applicable caselaw, and in keeping in mind our standard of review, we cannot say
that the chancellor erred in his award of unpaid rent and denial of other damages and attorney
fees. Venture Sales, 86 So. 3d at 913 (¶11) (We will affirm a chancellor’s decision where
he did not abuse his discretion and where the decision is supported by substantial credible
evidence.).
¶27. 110 South Street further claims that since the chancellor only awarded 110 South
Street unpaid rent, and not damages, then the calculation of rent should have been doubled
based on the statutory calculation of double rent for damages caused by a holdover tenant
pursuant to Mississippi Code Annotated section 89-7-25 (Rev. 2011), which provides:
When a tenant, being lawfully notified by his landlord, shall fail or refuse to
quit the demised premises and deliver up the same as required by the notice,
or when a tenant shall give notice of his intention to quit the premises at a time
specified, and shall not deliver up the premises at the time appointed, he shall,
in either case, thenceforward pay to the landlord double the rent which he
should otherwise have paid, to be levied, sued for, and recovered as the single
rent before the giving of notice could be; and double rent shall continue to be
paid during all the time the tenant shall so continue in possession.
¶28. However, the record reflects that 110 South Street failed to request double rent at the
hearing; the first mention of double rent is in 110 South Street’s notice of appeal. We
“cannot review an issue on appeal if the parties failed to present the issue to the chancellor
4
“Regarding issues of fact as to which a chancellor did not make specific findings,
this Court is required to assume that the chancellor resolved all such factual issues in the
appellee’s favor.” Sunburst Bank, 648 So. 2d at 1149.
12
at trial.” Lee v. Lee, 154 So. 3d 904, 909 (¶23) (Miss. Ct. App. 2014).
II. Cross-Appeal by Atrium
¶29. Atrium filed its cross-appeal, arguing that the chancellor erred in finding that the
rental period for the property commenced on April 1, 2014. Contrary to Judge Wilson’s
separate opinion, we find the application of the standard of review controlling as to this issue
based upon the record herein. Atrium submits that the testimony provided by both parties
at the hearing reflects that both parties agreed to a ninety-day rent-free period commencing
on April 1, 2014, and ending on June 15, 2014.
¶30. Pigott, the owner of 110 South Street, testified about the commencement of the rental
period for the building:
Q. You say that you gave them a free 45-day window to make
improvements. What happened there?
A. Well, that got extended out to 90 days eventually because they weren’t
ready to go, and I agreed to it.
Q. So they were 45 days late on the window?
A. That is correct.
Q. Do you recall when they officially opened?
A. I believe it was supposed to start around June 15th, so I think they were
a little bit late actually opening the doors. Maybe a week or two after
that.
Q. So from April 1st through June 15th, they had possession of the
premises?
A. Yes.
Q. But no operating business?
13
A. That’s right.
¶31. Atrium also testified regarding the ninety-day rent-free period agreed to by 110 South
Street due to Atrium’s need for renovations made to the building, and also due to the delay
in the completion of those renovations. Atrium testified that it finally opened for business
on June 15, 2014.
¶32. On cross-examination, Pigott admitted that 110 South Street sought payment for
unpaid rent beginning June 15, 2014:
Q. On the exhibit that’s been marked and entered into evidence here, that
was prepared by your attorney there, how long were you collecting rent
for on there or that you’re claiming rent for?
A. June through October.
Q. So that’s June 1 through October 31st?
A. I suppose.
Q. So you’re not entitled to rent except from June 15 to October 3; is that
correct?
A. No. I think that’s actually not the 1st. It would be the 15th, June 15th
through October 15th.
¶33. At the conclusion of the hearing, counsel for 110 South Street informed the
chancellor:
[Atrium] took possession April 1. They had 45 days of free rent. They went
another 45 days past that. If you apply the security deposit, which apparently
was just paid out of the blue, to that extra 45 days, they still come out ahead.
Subtract that. You’re talking about June, July, August, September, four
months, so you’re over—you’re almost to $15,000 right there. And then the
period of time they used in October, they had several, at least two weekends
that I know of they had access to. So before you get to anything else, we’re at,
14
at least, a five or six thousand dollar loss minimum, and the kitchen equipment
that they want to keep compensates us for that, and that cuts out all the
disputes.
¶34. Once both parties rested, the following exchange occurred between the chancellor and
counsel for Atrium during closing arguments:
Q. Well, I’ve got it at $17,500. That’s May, June, July, August and
September.
A. I believe the testimony, Your Honor, was that the rent did not start until
June the 15th.
Q. Okay. Well, maybe that’s right.
Later, the chancellor and counsel for Atrium again discussed the date Atrium’s rent payments
commenced:
Q. I’m going to find that [Atrium] should have probably paid for April and
May, too.
A. It was my understanding from the testimony of [110 South Street] here
today that it would all start June 15th, Your Honor.
Q. Well, do you want the lease agreement or do you want what they agreed
to?
A. Well, I mean, it’s his testimony he agreed to June 15th.
Q. Okay. I don’t remember that.
¶35. As acknowledged, when reviewing the decision of the chancellor, this Court employs
the following limited standard of review: we will only disturb a chancellor’s findings if they
are manifestly wrong or clearly erroneous, or if the chancellor applied an incorrect legal
standard. McNeil, 753 So. 2d at 1063 (¶21); Ainsworth, 139 So. 3d at 762 (¶3). “[We] will
affirm a chancellor’s decision when it is supported by substantial credible evidence.”
15
Venture Sales, 86 So. 3d at 913 (¶11). After our review, we find that the chancellor
examined the record before him, including the testimony and arguments of the parties, and
he was within his discretion to find Atrium liable to 110 South Street for rent payments
beginning on April 1, 2014, the date Atrium took possession of the property. In applying this
deferential standard of review to the record before us, we must affirm the chancellor’s award
of unpaid rent since the chancellor’s findings were based upon substantial credible evidence.
See id.
¶36. Atrium also argues that it does not owe 110 South Street for rent payments prior to
June 15, 2014, or damages, and as a result, the chancellor erred in granting 110 South Street
a lien on Atrium’s personal property. Since we affirm the chancellor’s determination that
Atrium does owe 110 South Street for rent payments beginning April 1, 2014, and that no
enforceable written agreement existed between the parties, this issue is then moot. We also
find no abuse of discretion by the chancellor in awarding 110 South Street a lien on Atrium’s
personal property unless Atrium pays the award of $9,800 within twenty days of the
judgment.5
¶37. THE JUDGMENT OF THE HINDS COUNTY CHANCERY COURT, FIRST
JUDICIAL DISTRICT, IS AFFIRMED ON DIRECT APPEAL AND CROSS-
APPEAL. ALL COSTS OF THIS APPEAL ARE ASSESSED EQUALLY BETWEEN
THE APPELLANT/CROSS-APPELLEE AND THE APPELLEE/CROSS-
APPELLANT.
LEE, C.J., GRIFFIS, P.J., ISHEE AND GREENLEE, JJ., CONCUR. IRVING,
P.J., AND WESTBROOKS, J., CONCUR IN PART WITHOUT SEPARATE
WRITTEN OPINION. WILSON, J., CONCURS IN PART AND DISSENTS IN PART
5
Venture Sales, 86 So. 3d at 913 (¶11); see also Pittman v. Pittman, 652 So. 2d 1105,
1110 (Miss. 1995).
16
WITH SEPARATE WRITTEN OPINION, JOINED BY FAIR, J. BARNES, J.,
DISSENTS WITH SEPARATE WRITTEN OPINION.
WILSON, J., CONCURRING IN PART AND DISSENTING IN PART:
¶38. I concur in part and dissent in part. I agree with the majority that the chancellor did
not err by not awarding 110 South Street attorneys’ fees or additional damages. Atrium does
appear to have agreed that it “ha[d] no defenses to the action filed against it by 110 South
Street”; however, I concur with the majority that in waiving “defenses to the action,” Atrium
did not admit that it was liable for attorneys’ fees or additional damages. The parties
subsequently agreed that “the amount, if any, due to 110 South Street” was to be determined
at the evidentiary hearing in the chancery court. This was reflected in an agreed order setting
the hearing and confirmed at the outset of the hearing. The forbearance agreement was
entered into evidence at the hearing; however, 110 South Street did not argue at the hearing
that the forbearance agreement was an admission of liability for attorneys’ fees or specific
damages. On the record before us, I agree that the chancellor did not err by declining to read
the agreement so broadly. Furthermore, there was no other basis for an award of attorneys’
fees, and the chancellor did not clearly err by (impliedly) finding that Atrium failed to prove
the additional damages it sought. Accordingly, I concur in the result reached by the majority
with respect to the issues raised in 110 South Street’s appeal.
¶39. I dissent with respect to Atrium’s cross-appeal. I agree with the chancellor that the
unsigned draft lease agreement is irrelevant, as the record supports the chancellor’s finding
that no enforceable written lease existed. At the hearing in the chancery court, 110 South
Street, through Pigott, admitted that the parties orally agreed that Atrium’s obligation to pay
17
rent would not commence until June 15, 2014:
Q. But y’all ultimately agreed that possession would take place on June
15th and the rent would start on that date?
A. That’s correct.
Q. On the exhibit that’s been marked and entered into evidence here, that
was prepared by your attorney there, how long were you collecting rent
for on there or that you’re claiming rent for?
A. June through October.
Q. So that’s June 1 through October 31st?
A. I suppose.
Q. So you’re not entitled to rent except from June 15 to October 3; is that
correct?
A. No. I think that’s actually not the 1st. It would be the 15th, June 15th
through October 15th.
¶40. Given Pigott’s admissions, the chancellor erred by finding that Atrium was liable for
seven months of rent beginning on April 1, 2014. The record simply does not support a
finding that Atrium is liable for more than four months of rent (June 15 to October 15), i.e.,
$14,000. The chancellor found, and the parties do not dispute, that Atrium had already paid
110 South Street $14,700, for which the chancellor gave Atrium credit. Accordingly, Atrium
has paid 110 South Street an amount greater than it orally agreed to pay in rent.
¶41. 110 South Street seems to argue that Atrium is somehow trying to have its cake and
eat it too by denying that the unsigned draft lease agreement is enforceable while also
insisting that its obligation to pay rent did not commence until June 15. However, Atrium’s
position that its obligation to pay rent did not begin until June 15 is not based on any
18
provision of the unsigned agreement. The unsigned agreement called for a sixty-day
“construction period” at the outset of the lease, but it did not expressly provide for a rent
abatement during that period.6 In any event, such an abatement period would have differed
from the parties’ oral agreement. Pigott testified that the parties’ initial oral agreement was
that no rent would be due for forty-five days, which he later agreed to extend to ninety days,
and they ultimately agreed that rent would commence on June 15. Thus, Atrium’s position
that its obligation to pay rent did not begin until June 15 is not based on the proposed lease
agreement that it rejected and refused to sign. Rather, Atrium relies on an undisputed oral
agreement to that effect.
¶42. In summary, the record does not support a finding that Atrium owes more in rent than
the undisputed amount it has already paid to 110 South Street. Therefore, in Atrium’s cross-
appeal, I would reverse and render the award of damages, as well as the lien granted against
Atrium’s personal property. Therefore, I respectfully concur in part and dissent in part.
FAIR, J., JOINS THIS OPINION.
BARNES, J., DISSENTING:
¶43. In its original complaint, 110 South Street demanded a judgment against Atrium “for
all damages, all sums due and all attorney[’s] fees incurred[.]” (Emphasis added). When
Atrium signed the October 3, 2014 forbearance agreement, in which it agreed that it had “no
defenses to the action filed against it,” Atrium waived any defense to a claim for attorney’s
6
In fact, another section of the unsigned agreement suggested the opposite. The
unsigned agreement stated that if 110 South Street failed to deliver vacant possession of the
property on April 1, 2014, rent would abate only until possession was delivered to Atrium.
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fees. “Parties are free to waive various rights . . . . In contracts[,] parties understand that
liability to the burden is a necessary incident to the right to the benefit.” RL Regi N.C. LLC
v. Lighthouse Cove LLC, 762 S.E.2d 188, 190 (N.C. 2014); see also Knight Props. v. State
Bank & Tr. Co., 77 So. 3d 491, 496-97 (¶¶27-28) (Miss. Ct. App. 2011) (finding contractual
language enforceable to waive certain defenses). As 110 South Street asserts, Atrium
received the benefit of the forbearance period in exchange for waiving “its defenses to
liability for damages and attorney[’s] fees incurred by 110 South Street.” Accordingly, I
dissent from the majority’s decision to affirm the chancery court’s judgment.
¶44. Before the chancery court, Atrium argued that Ray Mallard, who had signed the
forbearance agreement on Atrium’s behalf, was not “duly authorized by the LLC to execute
the agreement,”7 and Atrium’s owner, Deetra Eiland, stated that she never agreed to pay 110
South Street’s attorney’s fees. Counsel for Atrium further contended there was no separate
written agreement for attorney’s fees. However, Atrium subsequently attached a copy of the
signed forbearance agreement to its motion for reconsideration, acknowledging that the
parties had “entered into an agreement that [Atrium] could occupy the premises until 5:00
a.m. on October 4, 2014 and not after[.]”
¶45. Finding that Atrium’s agreement not to defend the claims raised in the complaint
waived its defense as to liability for attorney’s fees, I would reverse and remand for a
determination of the appropriate attorney’s fees.
7
However, Deetra Eiland, the club’s owner, testified that Mallard was her business
associate.
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