South Carolina Court of Appeals Opinion

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Today the South Carolina Court of Appeals published an opinion in Bluffton Towne Center v. Gilleland-Prince.

In this  civil matter, Beth Ann Prince (Tenant) appeals the master-in-equity’s order awarding Bluffton Towne Center, LLC (BTC) $35,784 in rent and late fees for Tenant’s breach of a commercial lease. Tenant argues the master erred in (1) finding the lease was terminated by abandonment; (2) finding Tenant was liable for future rents under the lease; (3) considering extrinsic evidence after finding the lease unambiguous; (4) not allowing Tenant to cross-examine Paul Watson, the managing member of BTC, about specific language in the subject lease and language in two subsequent leases BTC entered into with different parties; and (5) failing to recognize the lease was ambiguous. This Court affirms the master’s decision as modified.

On the first issue, Tenant argued that the landlord’s 10-day notice to pay or quit the premises was equivalent of a termination by eviction.  This Court disagrees finding that Tenant abandoned the leased premises when she voluntarily surrendered possession of the premises by turning over the keys and vacated the premises prior to the February 26 2010 notice to pay or quit the premises.

On the second issue, Tenant argued that the master erred in concluding that Simon is no longer valid law and holding that U.S. Rubber states the modern rule for damages recoverable for breach of a lease. This Court  finds that the master erred in concluding that Simon is no longer valid law, however the master properly held BTC was entitled to recover future rent as damages under the theories of both Simon and U.S. Rubber.

The Tenant further argued that the master erred in construing the “damages” term in the subject lease to entitle BTC to recover future rents.  This Court disagrees and finds that the master properly concluded the parties clearly and unambiguously intended for BTC to reserve all rights against Tenants for rent due during the full term of the lease. The lease stated BTC could reenter and repossess the property without prejudicing its right to damages.  Because the term damages was not defined in the lease, the master looked to the four corners of the lease to determine the meaning and effect the parties intended to give them.  The master found that the lease not only reserved BTC’s right to recover damages upon termination, but also provided a specific damages formula in the default provision. The provision stated that Tenant must pay all costs, damages, and expenses BTC suffers by reason of Tenant’s default.  The default provision made clear that upon termination of the lease, Tenant was not relieved of future obligations for damages resulting from breaching the lease.

On the third issue, the Tenant argued that the master erroneously considered extrinsic evidence regarding the parties’ intent after finding the subject lease was unambiguous. This Court agrees that the  master erred in admitting extrinsic evidence, but found the error was harmless. In the master’s discussion of his conclusion that the default provision had clear, unambiguous intent, he discussed the correspondence between the parties. The master noted that the correspondence was further evidence that BTC and Tenant construed the lease as an obligation for Tenant to pay future rents.  Tenant argued that the master erred in considering evidence outside of the four corners of the contract.  This Court reviewed the order as a whole, and found any error in considering extrinsic evidence was harmless because it was reasonable to infer the master was simply stating alternative grounds for his interpretation of the contract.

On the fourth issue, Tenant argued that the master abused his discretion by not allowing her to cross-examine Watson about language in the subject lease and two subsequent leases BTC entered into with different parties. The Court found that this issue was abandoned and not preserved for appellate review as Tenant failed to cite any legal authority in support of her conclusory argument.

On the final issue, Tenant argued that the master erred by failing to recognize the lease terms were ambiguous. After reading the subject lease as a whole, this Court finds the parties clearly had unambiguously intended that upon Tenant’s default and breach of the lease- Tenant would be liable to BTC for the rents due during the full term as damages. Based on the foregoing, the Court affirms as modified the master’s decision.

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