WEST SIDE LIMITED PARTNERSHIP
v. Orange County
No. 04 CVD 1185
W.B.Y. VENTURES, L.L.C. d/b/a
W.B. YEATS
Manning, Fulton & Skinner, P.A., by Michael S. Harrell, for
plaintiff-appellee.
David Curtis Smith & Associates PLLC, by David C. Smith, for
defendant-appellant.
MARTIN, Chief Judge.
Plaintiff instituted this action by the filing of a complaint
for summary ejectment in small claims court on 12 May 2004. From
a decision in favor of plaintiff, defendant filed notice of appeal
to the district court and requested a bench trial. The district
court entered an order of summary ejectment on 2 September 2004.
The following facts found by the court are undisputed.
On or about 1 March 2003, plaintiff and defendant entered into
a lease agreement whereby defendant leased certain space in a
shopping center owned by plaintiff. The lease agreement provided
for the payment of rent and other fees on or before the first of
each month. Defendant failed to make timely payments some months. Consequently, on 20 June 2003, 16 December 2003, 27 February 2004
and 12 March 2004 plaintiff mailed notices of default to defendant.
At the time of the 27 February 2004 notice, defendant owed more
than $13,000 in unpaid rent and other charges. Unlike when
defendant received the 20 June 2003 and 16 December 2003 notices,
defendant did not immediately cure the defaults identified in the
27 February 2004 notice, and on 10 March 2004, plaintiff instituted
a summary ejectment action against defendant. Plaintiff
voluntarily dismissed the action when defendant cured the defaults
identified in the 27 February 2004 and 12 March 2004 notices of
default.
When defendant failed to pay the April rental in a timely
fashion, plaintiff mailed another notice of default on 22 April
2004 contending that defendant had an outstanding balance of
$5,919.35 for April rent, late fees and attorneys fees. This
notice contained the following statement: “Notice is also hereby
given pursuant to paragraph 10 of your lease that if you fail to
cure your default by paying the entire outstanding amount due
within ten (10) days following the date of this notice, the
landlord will terminate your right to possession of the premises
without terminating your lease.”
On 27 April 2004 defendant tendered a check in the amount of
$4,525.06 and refused to pay any legal fees associated with the
dismissed summary ejectment action. Plaintiff wrote a responsive
letter on 29 April 2004 asserting that of the amount not paid by
defendant, only $860.51 was attributable to legal fees and theremaining amount constituted fees and late charges attributable to
an insufficient funds check defendant wrote to plaintiff. On 12
May 2004 plaintiff instituted the subject action for summary
ejectment.
The court concluded that defendant was in default and that
plaintiff was not required under the terms of the lease agreement
to give additional notice of its intent to dispossess defendant of
the premises. The court accordingly ordered defendant to vacate
the premises.
Defendant contends on appeal that the order of summary
ejectment should be vacated because plaintiff failed to give
adequate notice. Relying upon ARE-100/800/801 Capitola, LLC v.
Triangle Labs., Inc., 144 N.C. App. 212, 550 S.E.2d 31
(2001)(hereinafter “Capitola”), defendant argues plaintiff (1)
failed to notify defendant of its intent to re-enter the property
and terminate the lease or defendant's possession of the property,
and (2) failed to give clear notice that plaintiff was terminating
defendant's estate. See id. at 219, 550 S.E.2d at 35-36.
For a better understanding of defendant's argument, a summary
of the facts and holding of Capitola is necessary. In that case
the landlord mailed the tenant three notices of default for failure
to pay rent in a timely fashion. Id. at 215, 550 S.E.2d at 33.
Each notice contained language requesting payment or the landlord
would “immediately initiate curative remedies under the Lease and
the law.” Id. The landlord filed a summary ejectment action
contending the tenant breached the lease by failing to pay rentwithin three business days after three demands within one year.
This Court found the notices were defective because they failed to
notify the tenant which option the landlord had chosen to pursue of
the three options stated in the lease, namely, (1) re-entry of the
property; (2) termination of the lease; or (3) termination of the
tenant's possession of the property. Capitola, 144 N.C. App. At
218-19, 550 S.E.2d at 35-56.
This Court recently distinguished Capitola in Crabtree Ave.
Inv. Group, LLC v. Steak & Ale of N.C., Inc., __ N.C. App. __, 611
S.E.2d 442 (2005), in which the landlord purchased the commercial
property on 15 September 2003 after the tenant had paid its rent
for the month of September. The tenant did not pay the rent for
October 2003, and on 30 October 2003, the landlord mailed a
certified letter to the tenant notifying the tenant that rent for
October had not been received. The letter made demand for payment.
The tenant responded on 5 November 2003 by requesting production of
a tax document and a copy of the landlord's new deed, stating it
needed these documents in order to process the payment. The
landlord, by letter dated 7 November 2003, complied with the
tenant's request. When the tenant failed to pay by 17 November
2003, or within ten days after notice of non-receipt of rent, the
landlord terminated the lease and notified the tenant by a letter
from its legal counsel. On 26 November 2003 the tenant made rental
payments for the months of October, November and December. The
landlord returned the checks and filed an action for summary
ejectment on 4 December 2003, stating as ground the tenant'sfailure to pay within ten days after demand. The trial court
granted relief in favor of the landlord.
The tenant contended on appeal that the notice was inadequate.
This Court disagreed, noting that the lease contract provided that
upon the occurrence of an “[e]vent of [d]efault,” the landlord had
the option of pursuing certain remedies, including termination of
the lease agreement, “without any notice or demand whatsoever.”
Under the terms of the lease agreement, an event of default
included the tenant's failure to pay rent within ten days of
written notice from the landlord. This Court stated the landlord
gave such written notice by its certified letter of 30 October 2003
in which it informed the tenant that rental must be paid within ten
days after notice of non-receipt.
This Court distinguished Capitola by noting that the lease
agreement in that case “required that the landlord give written
notice of which remedy it was pursuing prior to taking the action”
whereas the lease in Crabtree did not require any notice of
termination, “[r]ather, [the landlord] could effectively terminate
the lease without notice following [the tenant's] failure to pay
rent within 10 days of written demand for rent past due.”
Paragraph 10.1 of the lease in the present case provides that
[i]n the event that Tenant [] fails to pay all
or any portion of any sum due from Tenant
hereunder ... within ten (10) days following
written notice... and shall not have cured
same within ten (10) days following written
notice from Landlord with respect to monetary
obligations, ... then Tenant shall be in
default hereunder and Landlord may, at its
option and without further notice to Tenant,
terminate Tenant's right to possession of the
Premises and without terminating this Leasere-enter and resume possession of the
Premises[.]
(Emphasis added). Paragraph 10.4 of the lease provides that
[i]f the Tenant is in Chronic Default,
Landlord may immediately exercise any and all
rights and remedies available under this
Lease, at law or in equity, without giving
Tenant any notice or opportunity to cure the
last default causing Tenant's Chronic Default,
(notwithstanding any notice or cure provision
or other lease provision to the contrary
hereof.)
(Emphasis added). Chronic default is defined in the lease as
including chronic late payments, which is further defined as the
late payment of rent four or more times within any period of 365
days.
Defendant was in default under both of the above paragraphs of
the lease at the time of the 22 April 2004 notice mailed by
plaintiff. Plaintiff had not paid the April rent and related
disputed charges. Thus, pursuant to paragraph 10.1, plaintiff
could take possession “without further notice to Tenant.”
Moreover, the late rent payment for April marked the fifth time
within a period of 365 days that plaintiff failed to pay the rent.
Pursuant to paragraph 10.4, defendant could exercise any remedy
available under the lease without giving any notice.
Even if, arguendo, the lease and law required the giving of
specific notice, the notice given by plaintiff in the present case
complied. Each notice clearly stated that if default was not cured
within ten days, “the landlord will terminate your right to
possession of the premises without terminating your lease.” Each
notice, therefore, expressly notified the tenant of the remedy thelandlord sought to enforce.
For the foregoing reasons, the trial court's order is
affirmed.
Affirmed.
Judges HUNTER and JACKSON concur.
Report per Rule 30(e).
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