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A ruling filed on July 22 by the Second District Court of Appeal overturned the circuit court’s summary judgment in favor of a landlord for the eviction of its tenant that operated a restaurant and a separate nightclub from its two spaces at the property. The ruling adds clarity to the burdens that must be met for summary judgments granting commercial evictions.
In the case of Atria Group v. One Progress Plaza, II, Atria Group took possession of the two suites in April 2010, and One Progress Plaza filed for eviction in September 2013 alleging that Atria had committed numerous nonmonetary violations including damage to the property, illegal activity, disregard of building rules and other lease requirements, unsanitary conditions, and failure to clean the premises.
Atria promptly filed its answer and affirmative defenses, as well as a request for mediation and a counterclaim. It denied the majority of the allegations regarding the claimed breaches, and it argued that One Progress Plaza failed to give the requisite notice of breach and opportunity to cure, and the eviction would cause an inequitable forfeiture based on Atria’s $2 million investment into the promotion and renovation of the premises and its payment of $25,000 per month in rent since 2010.
In pursuit of its motion for summary judgment, the landlord filed an affidavit which outlined the alleged violations of the lease. The circuit court granted summary judgment for eviction in favor of the landlord, and the tenant appealed.
The appellate panel’s opinion notes that the lease agreement between the parties provides an important caveat for the establishment of material defaults and breaches of the lease:
“(3) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee . . . where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commences such cure within said 30-day period and thereafter diligently prosecutes such cure to completion.”
The appellate ruling concludes that the circuit court erred in granting the summary judgment for eviction because the landlord’s property manager acknowledged in his deposition that most of the alleged defaults or violations of the lease had, in fact, been corrected, and the affidavits provided by both parties raise issues of material fact about the occurrence of the alleged defaults and Atria’s curative acts within the terms of the lease. The panel also found that One Progress Plaza failed to establish that the alleged violations of the lease were material, given that Atria was remedying any problems as they arose, and the landlord failed to refute all of the tenant’s affirmative defenses or to establish that they were legally insufficient.
The court was also swayed by Atria’s assertions that eviction would cause an inequitable forfeiture based on its $2 million investment into the promotion and renovation of the premises and its continuous payment of the rent since 2010. It found that the tenant may be able to prove that it would be inequitable to terminate the lease in light of its significant investment in the property.
The appellate court’s opinion reiterates the stringent nature of the burdens that typically must be met for summary judgments for commercial evictions. In reversing the summary judgment for eviction, the appellate court remanded the case back to the circuit court for further proceedings, and its findings as to the validity of the tenant’s assertions and affirmative defenses should prove to be very influential in the case.