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Landlord/Tenant — Commercial Lease – Abandonment – Re-Entry – Breach of Contract – Damages

By: Teresa Bruno, Opinions Editor//June 4, 2015

Landlord/Tenant — Commercial Lease – Abandonment – Re-Entry – Breach of Contract – Damages

By: Teresa Bruno, Opinions Editor//June 4, 2015

Bluffton Towne Center, LLC v. Gilleland-Prince (Lawyers Weekly No. 011-053-15, 16 pp.) (H. Bruce Williams, J.) Appealed from Beaufort County (Marvin Dukes III, Master-in-Equity) Substituted opinion. S.C. App.

Holding: The defendant-tenant had already abandoned the leased premises when the plaintiff-landlord re-entered it; moreover, the parties’ lease reserved the landlord’s right to damages. Therefore, the landlord was entitled to recover the future rents the tenant had promised to pay, less what the landlord collected from two new leases of the premises.

We modify and affirm the master-in-equity’s judgment in favor of the landlord.

Because the tenant returned her keys and admitted to voluntarily vacating the leased premises prior to the landlord’s notice to pay or quit the premises, the master properly concluded that the landlord terminated the lease upon the tenant’s abandonment by re-entering and re-letting the premises.

However, the master erred in concluding that Simon v. Kirkpatrick, 141 S.C. 139 S.E.2d 614 (1927), was no longer good law. Simon has not been overruled; in fact, courts have cited its propositions with approval.

Nevertheless, the master correctly concluded – in the alternative – that the landlord was entitled to recover future rents under the damages term in the lease pursuant to Simon. The default provision in the parties’ lease expressly reserved the landlord’s right to recover all damages resulting from the tenant’s breach after re-entering the premises.

Although the landlord’s re-entry and re-letting of the premises prevented the tenant from occupying the premises (which she had already abandoned), this sequence of events did not affect the tenant’s contractual liability to the landlord under the lease. Accordingly, the master properly concluded that the landlord was entitled to damages measured by the amount the landlord would have received as rent for the remainder of the tenant’s term had there been no default, less the amount of rent the landlord received from two subsequent tenants it acquired in an effort to mitigate damages.

The lease provided a specific damages formula in the default provision, saying the tenant must pay all costs, damages and expenses the landlord suffers by reason of the tenant’s default. The default provision further made clear that, upon termination of the lease, the tenant was not relieved of future obligations for damages resulting from her breach of the lease.

Reading the lease as a whole, the parties clearly intended that, upon default, the tenant would be liable to the landlord for the rents due during the full term as damages. No other construction would provide full meaning to all of the lease’s terms.

After finding that the lease was unambiguous, the master erroneously considered extrinsic evidence regarding the parties’ intent. However, such error was harmless. It is reasonable to infer that the master was simply setting forth alternative grounds for his interpretation of the contract. Furthermore, the master’s interpretation – based on the extrinsic evidence presented at trial – was consistent with the contract’s language.

Affirmed as modified.

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