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2008-UP-431 - Silver Bay Seafood Restaurants v. Mann

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Silver Bay Seafood Restaurants, Inc., Respondent,

v.

Lynn D. Mann, Appellant.

Lynn D. Mann, Third Party Plaintiff,

v.

Koustantivos Sialmas, Panagiotis Sialmas, Vassilios Sialmas, and Larry Velaetis, Third Party Defendants.


Appeal From Oconee County
 Ellis B. Drew, Jr., Master-In-Equity


Unpublished Opinion No. 2008-UP-431
Heard May 8, 2008 – Filed July 31, 2008 


AFFIRMED


R. Lawton McIntosh, of Anderson, for Appellant.

Stephen P. Groves, Sr., of Charleston, Thomas L. Stephenson, of Greenville, for Respondent.

PER CURIAM:  Lynn Mann appeals the Master-In-Equity’s failure to find Silver Bay Seafood Restaurants, Inc. (Silver Bay) breached a commercial lease by failing to pay rent.  We affirm.

FACTS

In December 2001, Silver Bay leased commercial property owned by Mann.  The Lease was to commence on April 1, 2002 and end on March 31, 2007.  Article V of the Lease provided the Lessee would “pay the rental when due.”

Article III of the Lease, entitled Repair and Maintenance, provided:

Subject to the Lessee’s right to inspect the premises prior to entering into this Lease, as additional consideration for the rental paid hereunder, the Lessee agrees to accept the Premises in the same condition and state of repair as exists upon the date of taking possession hereunder and thereafter, the Lessee shall be responsible for all maintenance and upkeep thereon.  Lessee agrees to promptly report any and all repair and maintenance problems to the Lessor.

Additionally, under Article IV of the Lease, the Lessor was to “[t]imely pay all taxes which may become due and owing on the Premises so long as not to interfere with possession thereof by the Lessee.”  The Lease also required the Lessor

to make additions totaling 1500 square feet, 1000 square feet in the form of a party room and 500 square feet in the form of a lighthouse in accordance with those certain plans and specifications (and any additions or alterations thereto) attached as Exhibit A.  Lessor also agrees to make improvements to the roof and parking lot of the said Premises in accordance with Lessee’s direction.

An addendum to the Lease provided a partial list of improvements Silver Bay agreed to make, including improvements to the bathroom, kitchen, electricity, and plumbing, as well as making “outside walls the same all around.”

Both Silver Bay and Mann renovated the portions of the Property as the Lease required.  Silver Bay’s personnel visited the Property daily and Mann was also there regularly.  On April 1, 2002, Silver Bay took possession of the Property and began operating a restaurant.

On June 1, 2004, a Notice of Levy was posted on the Property.  Mann paid the taxes owed the next day.  However, Mann did not remove the notice until the following week, immediately after Silver Bay informed him of its presence.  On June 9, 2004, Silver Bay’s attorney sent Mann a letter regarding the Notice of Levy and “certain repairs promised to be repaired on the property.”  On June 30, 2004, Silver Bay’s attorney sent another letter to Mann asserting Silver Bay had lost $30,000 as a result of the Notice of Levy.   The letter also mentions a “wall problem” and states the Lease is null and void and Silver Bay intended to vacate the Property on July 31, 2004.  On July 21, 2004, Silver Bay informed Mann it would not vacate the Property but instead would continue to make its monthly rental payments and sue Mann for damages.  

On August 18, 2004, Silver Bay commenced an action against Mann for breach of contract for Mann’s faulty construction of an addition required by the Lease and failure to pay taxes.  Mann answered, counterclaimed, and filed a third-party complaint against the guarantors of the Lease, seeking rents due and other damages under the Lease.  

In December 2004, Silver Bay subleased the Property to Neptune Diner.  Silver Bay continued making the monthly rental payments until Neptune Diner vacated the Property in September 2005.  Subsequently, Mann listed the Property for lease with a real estate agent.

On April 13, 2006, the parties consented to refer the matter to a master.   At trial, one of the guarantors, Larry Velaetis, testified the roof leaked the first rain after Silver Bay opened the restaurant.   He further testified the leaks continued following every rain.  Metz Looper, a former magistrate, testified that the three times he visited Silver Bay, he observed a musty odor, water on the floor, and the roof leaking.

Velaetis testified Silver Bay orally informed Mann after the first leak occurred and once the leaks continued but never provided written notice or demand regarding the leaks, despite the fact the Lease required any notice or demand be in writing.  Velaetis admitted Silver Bay did not keep any record of the dates of the leaks.  He also acknowledged Silver Bay failed to inspect the roof when it took possession and once the roof began leaking, it did not have it inspected to determine the cause of the leaks.  Mann testified that at Silver Bay’s request, he had sent a roofer to the Property after Silver Bay took possession.  Additionally, Mann testified he had a duty to provide a properly constructed roof. 

The master denied both Silver Bay’s and Mann’s requests for damages.   Regarding Silver Bay’s damages, the master found:

Silver[ B]ay did nothing to document the occasions when water allegedly leaked into the restaurant.  Although the Court finds credible testimony to establish some water damage due to leaks, there was no evidence presented establishing a link between these events and Silver[ B]ay’s declining revenues, the number of occasions the leaks supposedly occurred or the extent of damages allegedly incurred as a result of the leaks.

The master determined Silver Bay “failed to establish its business was damaged due to water intrusion . . . [and] lost revenues with reasonable certainty.”  The master further found “[t]he alleged damages due to the posting of delinquent tax notice, if at all, are inconsequential.  The notice was posted for a rather short period of time and the taxes were paid by Mann in short order.”  

As to Mann’s damages, the master determined:

As stated, the Court finds there was credible testimony of some water damage due to leaks.  However, I find there is a significant question of breach of the lease by Mann based upon his failure to properly repair the roof.  Accordingly, the Court denies Mann’s claim for damages due under the Lease. 

Mann filed a Rule 59(e), SCRCP, motion for reconsideration that the master denied.  This appeal followed.

STANDARD OF REVIEW

“An action seeking damages for breach of contract is . . . an action at law . . . .”  Kuznik v. Bees Ferry Assocs., 342 S.C. 579, 589, 538 S.E.2d 15, 20 (Ct. App. 2000).  In an appeal from the final judgment of a master, this court has the same scope of review as if the appeal is from the circuit court without a jury.  Tiger, Inc. v. Fisher Agro, Inc., 301 S.C. 229, 237, 391 S.E.2d 538, 543 (1990).  On appeal of an action at law tried without a jury, this court’s review is limited to correction of errors at law.  Epworth Children’s Home v. Beasley, 365 S.C. 157, 164, 616 S.E.2d 710, 714 (2005).  The master’s findings are equivalent to a jury’s findings in a law action.  King v. PYA/Monarch, Inc., 317 S.C. 385, 388-89, 453 S.E.2d 885, 888 (1995). 

We may not consider the case based on our view of the preponderance of the evidence, but must construe the evidence presented to the Master so as to support his decision wherever reasonably possible.  We must look at the evidence in the light most favorable to the respondents and eliminate from consideration all evidence to the contrary.

Sheek v. Crimestoppers Alarm Sys., 297 S.C. 375, 377, 377 S.E.2d 132, 133 (Ct. App. 1989) (citations omitted). 

LAW/ANALYSIS

Mann argues the master erred in failing to award damages to him under the Lease.  Specifically, Mann asserts Silver Bay did not establish the elements for constructive eviction because it did not vacate the Property before filing its cause of action.  We disagree.

A tenant asserting constructive eviction must show: (1) some intentional act or omission of the landlord deprived the tenant of possession or substantially interfered with the tenant’s beneficial use or enjoyment of the leased premises and (2) as a result of the act or omission by the landlord, the tenant abandoned the premises.  Pleasantburg Warehouse Co. v. Global Distribution, Inc., 287 S.C. 422, 423, 339 S.E.2d 135, 136 (Ct. App. 1985).

There is no “constructive eviction” if the tenant continues in possession of the premises however much he may be disturbed in the beneficial enjoyment.  To establish a constructive eviction of the premises, in order to avoid liability for rent, the tenant must surrender or abandon the premises within a reasonable time after the landlord’s wrongful act.

49 Am. Jur. 2d Landlord & Tenant § 598 (2006) (footnotes omitted).

Mann contends Silver Bay does not meet the elements for constructive eviction because it was still in possession of the Property when it brought the breach of contract action. Although Silver Bay retained possession of the Property after filing suit, it continued to pay rent until Neptune Diner vacated the Property.  Further, the master’s order contains no indication he relied on the theory of constructive eviction in finding Silver Bay was not liable for damages to Mann.  Rather, the order seems to indicate the master found Silver Bay was not liable because Mann had breached the terms of the Lease by failing to properly repair the roof.  When “a contract is not performed, the party who is guilty of the first breach is generally the one upon whom all liability for the nonperformance rests.”  Silver v. Aabstract Pools & Spas, Inc., 376 S.C. 585, 594, 658 S.E.2d 539, 543 (Ct. App. 2008) (quoting Willms Trucking Co. v. JW Constr. Co., 314 S.C. 170, 178, 442 S.E.2d 197, 201 (Ct. App. 1994)). 

The master found “credible testimony of some water damage due to leaks” as well as a “significant question of breach of the lease by Mann based upon his failure to properly repair the roof.”  The record contains evidence to support finding Mann breached the Lease by failing to repair the roof.  Mann conceded he had a duty to provide a properly constructed roof.  Velaetis testified the roof leaked from the first rain after Silver Bay took possession.  Additionally, Looper testified he observed the leaks.  Questions regarding credibility and weight of evidence are exclusively for the master.  Sheek v. Crimestoppers Alarm Sys., 297 S.C. 375, 377, 377 S.E.2d 132, 133 (Ct. App. 1989).  Accordingly, because the record contains evidence indicating Mann breached the contract first by failing to properly repair the roof, the master did not err in failing to award Mann damages.

Based on the foregoing, the order of the master is

AFFIRMED.

HEARN, C.J., and SHORT and KONDUROS, JJ., concur.