Poplar Avenue 1856 Center, LLC v. Nexus Exxon, Inc., et al.

This appeal involves a commercial lease of property operated as a convenience store in Memphis. The lease provided that it was to be construed and enforced in accordance with Georgia law. The lease was for an initial term of ten years, but it provided that the tenant had the option to renew the lease for two additional terms of five years commencing at the expiration of the initial term. Near the end of the initial ten-year term, the landlord sent a notice of nonrenewal to the tenant, notifying the tenant that the lease was scheduled to expire because the tenant had failed to timely exercise the option to renew it. One week later, the tenant sent the landlord written notice of its intent to exercise the option to extend the lease for an additional five years. The tenant’s letter asserted that the provision of the lease regarding when notice was to be provided “[did] not make any sense” and informed the landlord that the tenant was thereby exercising the option. The landlord filed this lawsuit, asking the trial court to hold that the lease had expired by its terms when the tenant did not timely exercise the option to extend it, and therefore, the landlord was entitled to possession of the property and a judgment for rent at the holdover rate provided in the lease. The tenant filed a counterclaim for declaratory relief. On cross motions for summary judgment, the trial court held that the lease was ambiguous but that the only reasonable interpretation of the lease was that notice of intent to exercise the option was due ninety days before the end of the initial term. Because the tenant failed to provide notice by that date, the trial court concluded that the initial term of the lease expired, the landlord was entitled to possession, and the tenant was liable for holdover rent and attorney fees. The tenant appeals. We affirm and remand for further proceedings.