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Dennis Corporation v. CPB, LLC

Supreme Court of West Virginia

October 20, 2017

Dennis Corporation, Plaintiff/Counterclaim Defendant Below, Petitioner
CPB, LLC, Defendant/Counterclaim Plaintiff Below, Respondent

         Putnam County 14-C-218


         Petitioner and Plaintiff below Dennis Corporation, by counsel Timothy P. Rosinsky, appeals the December 4, 2015, and August 31, 2016, orders of the Circuit Court of Putnam County that, respectively, granted summary judgment in favor of Respondent and Defendant below CPB, LLC, and awarded damages. Respondent, by counsel Richard E. Holtzapfel and Andrew F. Workman, filed a response in support of the circuit court's order.

         This Court has considered the parties' briefs and the record on appeal. The facts and legal arguments are adequately presented, and the decisional process would not be significantly aided by oral argument. Upon consideration of the standard of review, the briefs, and the record presented, the Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the circuit court's order is appropriate under Rule 21 of the Rules of Appellate Procedure.

         On January 16, 2009, the parties entered into a lease agreement pursuant to which petitioner, an engineering consulting firm, agreed to rent from respondent 1, 400 square feet of office space/business property located in the Clyffside Professional Building in Putnam County, West Virginia. The lease provided for an initial three year term, beginning on January 20, 2009, and expiring at midnight on January 19, 2012. Under the lease, petitioner agreed to pay $2, 000 per month, due and payable in advance on or before the first of each month.

         The lease also included an option to renew for an additional three-year term subject to certain requirements, including that, if petitioner (Tenant) elects to exercise the option to renew, it shall give written notice to respondent (Landlord) of such election at least ninety days before the date of the lease's expiration. Additionally, the lease included a clause that adjusts the amount of the base rent based upon the "Consumer Price Index for All Urban Consumers" ("CPI") annual average for the year 2007 should petitioner elect to exercise the renewal option.

         On December 28, 2011, respondent's owner, David Tabor, sent an e-mail to petitioner's Division Manager, Travis Miller, regarding the renewal option. Mr. Tabor's e-mail referenced "the parts out of the lease that pertain to renewal"-that is, the paragraphs indicating (1) that the lease term is three years, (2) that petitioner has the option to renew, and (3) that the rent will be adjusted upon renewal based upon the CPI annual average for the year 2007. Mr. Tabor's e-mail also noted that, under the terms of the lease, petitioner should have, but did not, provide written notice of intent to renew by October 19, 2011, which was approximately ninety days prior to the expiration of the lease. Nonetheless, Mr. Tabor advised that "[r]egardless of the technicalities I am fine with a simple note indicating Dennis's intent to renew for another three year term." He proposed that they renew the lease "for 3 years, (nothing to sign or execute) but agree to a 10% rent increase (closer to the 2008 CPI) for a new rent . . . of $2200 per month."

         On January 2, 2012, Mr. Miller forwarded Mr. Tabor's e-mail to Petitioner Mo Denny, who, by e-mail on January 3, 2012, responded that "[a] 10 percent increase for the 3 year period of lease renewal is agreeable. . . . Please contact David that we do want to continue our lease." By e-mail of January 9, 2012, Mr. Miller advised Mr. Tabor that it "[s]ounds good to us. Let me know if you need me to do anything else."

         Following the expiration of the initial lease, petitioner remained on the premises and began paying the new rental rate of $2, 200 per month, as agreed to by the parties. The parties agree that petitioner got behind a number of times on its rent payments but, for the most part, was able to catch up on payments throughout 2012 and 2013. On January 17, 2014, Mr. Tabor sent a letter to petitioner's owner, Dan Dennis, and Mr. Miller concerning overdue rent, requesting that petitioner timely remit monthly rent payments during 2014

         On May 20, 2014, due to petitioner's continued delinquency in payment, respondent's counsel gave written notice to petitioner that "[i]f all outstanding balances due are not paid in full by no later than 5 pm on Friday, May 30, 2014, CPB will have to consider exercising its explicit contractual right to re-enter and take possession of the Premises and alter locks to prevent access to the Premises, which can be done without terminating the lease."

         On June 13, 2014, with rent payments still delinquent, respondent's counsel advised petitioner that, pursuant to the parties' lease, it was "exercising its explicit contractual right to re-enter and take possession of the Premises and alter locks to prevent access to the Premises." Attempts thereafter to negotiate a resolution were unsuccessful. On July 31, 2014, respondent advised petitioner that its lease was terminated and that it had secured a new tenant to mitigate its damages. The following day, respondent informed petitioner that it removed petitioner's property from the premises.

         Petitioner thereafter filed a Verified Petition for Preliminary Injunctive Relief and Complaint for Damages in the Circuit Court of Putnam County alleging that respondent wrongfully locked it out and seized its personal property. Respondent filed a response in opposition to the petition for preliminary injunction, an answer, affirmative defenses, and a counterclaim. Petitioner then filed affirmative defenses and an answer to respondent's counterclaim. Following a hearing on petitioner's petition for injunctive relief, the circuit court ordered that respondent deliver possession of all personal property to petitioner immediately and that petitioner post a $10, 000 cash or surety bond. At the conclusion of discovery, respondent filed a motion for summary judgment on all claims, including its counterclaim against petitioner.

         A hearing on respondent's motion for summary judgment was conducted on November 20, 2015. Petitioner filed a response. By order entered December 4, 2015, the circuit court granted respondent's motion, holding that evidence of petitioner's conduct clearly showed its intention to renew the lease and established that petitioner and respondent "mutually assented to the term of the lease as offered and understood by [respondent]." The court further held that petitioner's "payment of the increased rent pursuant to the rent escalation clause constituted an affirmative act of its intent to renew the lease and an acceptance of its terms." (Footnote omitted). The circuit court concluded that respondent properly exercised its contractual right to re-take the premises following petitioner's default on rent payments.

         In a subsequent order entered August 31, 2016, following a separate hearing on damages, [1] the court awarded respondent the following: (1) unpaid rent in the amount of $7, 722.58; (2) unpaid late fees in the amount of $1, 320; (3) interest accrued at the 10% contractual rate; and (4) attorney's fees and expenses totaling $33, 797.78, plus any additional fees and expenses incurred with regard to the January 29, 2016, hearing. Finally, the circuit court ordered that respondent "shall be entitled to the $10, 000 cash bond posted by [petitioner]." This appeal followed.

         We begin with a review of the December 4, 2015, summary judgment order that concluded that, as a matter of law, the parties renewed the initial lease in its entirety. We review petitioner's appeal of this order de novo. See Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). (holding that "[a] circuit court's entry of summary judgment is reviewed de novo."). Under Rule 56(c) of the West Virginia Rules of Civil Procedure, summary judgment should be granted "where the moving party shows by 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, . . . that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter ...

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