IN THE SUPERIOR COURT OF DEKALB COUNTY STATE OF...

IN THE SUPERIOR COURT OF DEKALB COUNTY

STATE OF GEORGIA

WATERFORD PARK, LLC and PS ENERGY GROUP, INC., Assignees of JK COMPLEX, LLC,

ORIGINAL P l a i n t i f f s ,

v. C I V I L ACTION F I L E NO. 10CV13242-4

CHURCH OF SCIENTOLOGY OF GEORGIA, INC., a Georgia Corporation,

Defendant.

DEFENDANT'S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

Defendant Church o f S c i e n t o l o g y o f Georgia, I n c . ( t h e

"Church") f i l e s i t s Memorandum i n Law i n O p p o s i t i o n t o

P l a i n t i f f s ' M o t i o n f o r Summary Judgment as f o l l o w s :

I . INTRODUCTION

Because o f t h e P l a i n t i f f l a n d l o r d ' s n e g l i g e n t maintenance o f

th e p r o p e r t y l e a s e d by t h e Church, and t h e r e f u s a l o f t h e

la n d l o r d / o w n e r s t o r e s o l v e p e r s i s t e n t f l o o d i n g o f t h e P r o p e r t y ,

t h e premises a t i s s u e became u n f i t f o r t h e Church t o c a r r y on i t s

a c t i v i t i e s d u r i n g t h e t e r m o f the l e a s e . A l t h o u g h many

c o m p l a i n t s were made t o t h e l a n d l o r d r e g a r d i n g t h i s c o n d i t i o n , i t

was never a d e q u a t e l y r e p a i r e d and c o n t i n u e d o v e r t i m e t o f u r t h e r

d e t e r i o r a t e t o t h e degree t h a t i t was n o t r e a s o n a b l y useable f o r

158626.1 1

t h e purposes f o r w h i c h i t was l e a s e d . F a c i n g a c l e a r breach o f

th e terms o f t h e l e a s e r e q u i r i n g t h e l a n d l o r d t o m a i n t a i n t h e

premises i n h a b i t a b l e and r e a s o n a b l e c o n d i t i o n , t h e Church

a c c o r d i n g l y sought o t h e r q u a r t e r s and p r o v i d e d r e a s o n a b l e n o t i c e

t o t h e l a n d l o r d t h a t i t was v a c a t i n g t h e premises.

The r e s o l u t i o n o f d i s p u t e d f a c t u a l a s s e r t i o n s by t h e p a r t i e s

and t h e d e t e r m i n a t i o n o f whether t h e d e f e n d a n t Church a c t e d

l a w f u l l y and r e a s o n a b l y i n v a c a t i n g t h e Premises under t h e

ci r c u m s t a n c e s , can o n l y be d e t e r m i n e d by t h e t r i e r o f f a c t .

Summary judgment s h o u l d a c c o r d i n g l y be d e n i e d .

I I . STATEMENT OF FACTS

S c i e n t o l o g y i s a wo r l d w i d e r e l i g i o u s movement w i t h m i l l i o n s

of members. I t i s comprised o f o v e r 7,000 churches, m i s s i o n s and

groups s u p p o r t i n g h u m a n i t a r i a n programs t h a t r e a c h m i l l i o n s o f

people e v e r y y e a r . The l o c a l Church o f S c i e n t o l o g y i n Georgia

m i n i s t e r s t o a l o c a l c o n g r e g a t i o n , p r o v i d i n g S c i e n t o l o g y t r a i n i n g

and c o u n s e l i n g s e r v i c e s and s e e k i n g t o d i s s e m i n a t e i t s f a i t h t o

new p r o s p e c t i v e members i n t h e community. S c i e n t o l o g y r e l i g i o u s

s e r v i c e s a r e p r o v i d e d d a i l y a t t h e Church's f a c i l i t i e s , and are

e s s e n t i a l t o t h e p r a c t i c e o f t h e r e l i g i o n . See A f f i d a v i t o f

Deborah Q. Danos f f 3, 4, a t t a c h e d t o Defendant's Response t o

P l a i n t i f f s ' Statement o f Un d i s p u t e d M a t e r i a l Facts as E x h i b i t

"A."

158626.1 2

The Church has been r e q u i r e d t o r e n t f a c i l i t i e s t o d e l i v e r

s e r v i c e s w h i l e engaged i n t h e purchase and r e n o v a t i o n and

e s t a b l i s h m e n t o f i t s own p r o p e r t y . I d . a t f 5. From September 15,

2007 t o August 31, 2010, t h e Church o p e r a t e d i n l e a s e d space a t

4480 N o r t h S h a l l o w f o r d Road, Dunwoody, Georgia ( t h e " P r o p e r t y " ) . 1

I d . a t 11 6. However, maintenance and d e s i g n problems w i t h t h e

b u i l d i n g became m a n i f e s t when heavy r a i n s caused v a r y i n g degrees

of f l o o d i n g a t t h e premises - t h e degree p r e d i c a t e d upon t h e

l e v e l o f d i s r e p a i r and t h e amount o f r a i n i n v o l v e d . I d . a t f 7.

The P r o p e r t y i s s i t u a t e d such t h a t d u r i n g r a i n s i t i s

necessary t o d i v e r t w a t e r away f r o m t h e b u i l d i n g , where i t i s

c o l l e c t e d i n a pond and pumped o u t t o a v o i d f l o o d i n g . I d . a t f

8. However, a l t h o u g h t h e f a c t was n o t d i s c l o s e d t o t h e Church

b e f o r e t h e l e a s e was s i g n e d , t h e P l a i n t i f f ' s pump system was

m a n i f e s t l y i n a d e q u a t e when t h e Church t o o k p o s s e s s i o n , i t

p r o g r e s s i v e l y f e l l i n t o f u r t h e r d i s r e p a i r and combined w i t h t h e

apparent i n a d e q u a t e d e s i g n o f t h e system, i t was u n a b l e t o

p e r f o r m i t s i n t e n d e d f u n c t i o n . I d . a t % 9. As a r e s u l t , t h e

Church b u i l d i n g e x p e r i e n c e d a number o f i n c i d e n t s o f f l o o d i n g ,

d u r i n g w h i c h w a t e r f l o w e d t h r o u g h t h e back doors o f t h e Premises.

I d . a t f 10. A f t e r f l o o d i n g o f t h e Premises i n 2008, t h e

The Church's o r i g i n a l l a n d l o r d a t 4480 N o r t h S h a l l o w f o r d Road was JK Complex, LLC. who conveyed t h e P r o p e r t y t o John Hardy Jones and M a r j o r i e K n i g h t who conveyed t h e P r o p e r t y t o P l a i n t i f f W a t e r f o r d Park, LLC on A p r i l 9, 2010.

158626.1 3

l a n d l o r d p e r f o r m e d work on t h e sump pump system and p i p e s , which

caused a temporary r e s p i t e . I d . a t f 11. However, i n o r about

May 2008, t h e b u i l d i n g f l o o d e d a g a i n . I d . a t H 12. T h i s time

Steve Rowland, t h e g e n e r a l c o n t r a c t o r f o r t h e p r o p e r t y owner,

checked and f o u n d a c o l l a p s e d p o r t i o n o f t h e t u b i n g used t o c a r r y

t h e w a t e r away fr o m t h e b u i l d i n g . I d . a t 1f 13.

Church s t a f f member K i m b e r l y Desormeaux i s aware o f a t l e a s t

f o u r (4) d i s t i n c t t i m e s i n 2009 t h a t t h e Church b u i l d i n g f l o o d e d

i n t h r o u g h t h e back door, r e q u i r i n g e x t e n s i v e c l e a n up. See

A f f i d a v i t o f K i m b e r l y Desormeaux % 3, a t t a c h e d t o Defendant's

Response t o P l a i n t i f f s ' Statement o f U n d i s p u t e d M a t e r i a l Facts as

E x h i b i t "B." The w o r s t f l o o d i n g was i n September 2009. See

A f f i d a v i t o f M e r r i k L e v e t a n H 6, a t t a c h e d t o Defendant's Response

t o P l a i n t i f f s ' Statement o f U n d i s p u t e d M a t e r i a l F a c t s as E x h i b i t

"C." A f t e r t h e w o r s t day o f f l o o d i n g , W a t e r f o r d Park's employee

t o l d Church s t a f f member t h a t t h e s p i l l w a y on t h e pond i n f r o n t

o f t h e b u i l d i n g wasn't m a i n t a i n e d w e l l enough. He s a i d t h a t the

l a n d l o r d had t o go i n and p u l l o u t t h e excess w a t e r p l a n t s t o

make i t d r a i n p r o p e r l y . I d .

E i t h e r t h i s o r o t h e r n e cessary r e p a i r s were n o t done,

however, as each t i m e i t r a i n e d h e a v i l y i n 2009 and 2010 the back

h a l l o f t h e Church would f l o o d . I d . a t 1 7. These f l o o d s

t y p i c a l l y caused rooms i n t h e Church's p a s t o r a l c o u n s e l i n g

o f f i c e s used by Church m i n i s t e r s and t h e r e l i g i o u s course room t o

158626. l 4

be f l o o d e d . I d . D e s p i t e cleanup e f f o r t s , i t would t a k e days

b e f o r e e v e r y t h i n g was d r y and the odor was o f f e n s i v e , and

p r o b a b l y t o x i c . I d . a t f f 7, 11. On a t l e a s t one o c c a s i o n , the

bottoms o f many boxes o f books and o t h e r m a t e r i a l s were soaked.

I d . a t f 8.

The l a n d l o r d c a l l e d i n a p r o f e s s i o n a l w a t e r removal s e r v i c e

f rom t i m e t o t i m e , who b r o u g h t a wet vac and would work t o p u l l

up t h e water. I d . a t 1 9. Mr. Rowland would a l s o o c c a s i o n a l l y

b r i n g i n b i g f a n s t o h e l p a l l e v i a t e t h e excess m o i s t u r e . However

t h e e f f o r t s were o n l y p a r t i a l l y e f f e c t i v e and t h e l a r g e , n o i s y

f a n s r u n n i n g i n t h e h a l l w a y near t h e course room f o r weeks were a

major d i s r u p t i o n o f t h o s e engaged i n r e l i g i o u s s e r v i c e s and

s t u d i e s a t t h e Church. I d .

The w a t e r removal p r o f e s s i o n a l i n f o r m e d Mr. Levetan, when he

commented on how bad i t was, t h a t t h i s was n o t h i n g compared t o

t h e way i t was b e f o r e ( t h e Church moved i n ) : a stream used t o r u n

from f r o n t door t o t h e back door. I d . a t 1 10. Mr. Levetan's

w i f e c o u l d n o t come i n t o t h e Church f o r s e v e r a l days due t o her

s e n s i t i v i t y t o mold and mildew. I d . a t 1 1 1 . Another Church

member and h i s w i f e d i d n o t come t o t h e Church t o s t u d y o r t o any

events f o r a w h i l e , due t o t h e mold/mildew s m e l l i n t h e course

room and t h e adverse a f f e c t on her asthma. See A f f i d a v i t o f

Debbie Benk, f H 3, 4, a t t a c h e d t o Defendant's Response t o

158626.1 5

P l a i n t i f f s ' Statement o f U n d i s p u t e d M a t e r i a l Facts as E x h i b i t

"D."

S t a f f member Susan M u l t z vacuumed up t h e water on many

occasions, when i t would r a i n d u r i n g t h e day and she was c a l l e d

t o come i n l a t e a t n i g h t on more t h a n one o c c a s i o n when no one

was a t t h e Church t o handle t h e f l o o d i n g . See A f f i d a v i t o f Susan

M u l t z % 3, a t t a c h e d t o Defendant's Response t o P l a i n t i f f s '

Statement o f U n d i s p u t e d M a t e r i a l F a c t s as E x h i b i t "E." Once when

i t f l o o d e d b a d l y , Steve Rowland, t h e g e n e r a l c o n t r a c t o r f o r t h e

b u i l d i n g s a t 4480 and 4488 N o r t h S h a l l o w f o r d Road, s a i d i t was

because t h e p i p e became u n a t t a c h e d i n t h e back o f t h e b u i l d i n g .

I d . a t f 6. A f t e r e xamining t h e p i p e , Ms. M u l t z doubted t h a t a

p i p e t h a t s m a l l would c a r r y enough w a t e r t o be e f f e c t i v e i n a

heavy r a i n . I d . I t t o o k days f o r t h e rooms t o f u l l y d r y and i t

always s m e l l e d moldy i n t h e back rooms where t h e c o u n s e l i n g i s

d e l i v e r e d . I d . a t f 7.

The Church's D i r e c t o r o f S p e c i a l A f f a i r s e x p e r i e n c e d a g r e a t

d e a l o f c o n c e r n about t h e f l o o d i n g s i n c e t h e Church never knew

when t h e r a i n w o u l d r o l l i n t h e back door. When i t r a i n e d a t

n i g h t , I w o r r i e d t h a t no one was i n t h e b u i l d i n g t o see i f i t was

f l o o d i n g and what books and m a t e r i a l s may be damaged as a r e s u l t .

Danos Dec. % 13. A d d i t i o n a l l y , I was concerned t h a t t r y i n g t o

p r o v i d e s p i r i t u a l c o u n s e l i n g i n rooms t h a t had t h e s t e n c h o f

158626.1 6

mildew would have a n e g a t i v e impact on p u b l i c r e l a t i o n s f o r t h e

Church. I d . a t % 14.

Mr. Rowland a t t e m p t e d many t i m e s t o c o r r e c t t h e problem -

r e p a i r i n g t h e pump, c l e a r i n g t h e d r a i n , c l e a r i n g a n o t h e r d r a i n ,

r e - a t t a c h i n g p i p e s - each t i m e p r o m i s i n g t h a t we would n o t f l o o d

a g a i n . Yet, t h e f l o o d i n g c o n t i n u e d . I d . a t f 15. I n h i s

a f f i d a v i t , Mr. Rowland s p e c u l a t e d t h a t t h e brok e n d r a i n

d i s c o v e r e d on May 3, 2010 may have been caused by c h i l d r e n

p l a y i n g a round t h e b u i l d i n g . However, no c h i l d r e n were ever

a l l o w e d t o p l a y i n t h e back o f t h e b u i l d i n g . There was no room

even t o w a l k t h e r e , l e t a l o n e p l a y , as t h e i v y grows t h i c k down a

h i l l r i g h t up t o t h e w a l l s o f t h e b u i l d i n g w h i c h a r e a l l g l a s s .

Desormeaux A f f . U 4.

Because t h e l a n d l o r d was i n c a p a b l e o r u n w i l l i n g t o r e s o l v e

the f l o o d i n g problem, t h e Church and i t s members bought sand bags

t o b l o c k t h e w a t e r coming i n t o t h e back door as a means o f s e l f

h e l p . I n a s u b s t a n t i a l f l o o d i n May 2010, Church members

sandbagged t h e r e a r e n t r y t o t h e Church t o keep t h e wa t e r from

r e p e a t e d l y coming i n t h e h a l l w a y , as t h e y had over some p e r i o d of

time because o f t h e l a n d l o r d ' s incompetence. See A f f i d a v i t o f

Doug MacKay K 5, a t t a c h e d t o Defendant's Response t o P l a i n t i f f s '

Statement o f U n d i s p u t e d M a t e r i a l F a c t s as E x h i b i t "F." The

sandbags were t h e Church's o n l y defense a g a i n s t t h e f l o o d i n g ,

even a f t e r i t s h a v i n g been ' f i x e d ' so many t i m e s i n t h e p a s t .

158626.1 7

Danos. A f f . f 18. However, t h e r e a r e n t r y t o t h e Church was

unusable because o f t h e sandbags and t h e p r o p e r t y manager f o r

W a t e r f o r d Park demanded t h e i r removal, s t a t i n g t h e y were

u n s i g h t l y and caused a h a z a r d on t h e s i d e w a l k . Danos A f f . % 20,

MacKay A f f . H 5. I n a t l e a s t one i n s t a n c e , t h e l a n d l o r d o r

maintenance man f o r t h e P r o p e r t y p h y s i c a l l y removed t h e sandbags

which were p r o t e c t i n g t h e b u i l d i n g , c a u s i n g f u r t h e r f l o o d i n g . I n

t h e n e x t r a i n f a l l i n June 2010, i n d e f i a n c e o f t h e l a n d l o r d ' s

improper removal, Church s t a f f r e t u r n e d t h e sandbags as t h e o n l y

defense t o t h e p e r s i s t e n t f l o o d i n g . MacKay A f f . f 5. As a

r e s u l t o f t h e r e p e a t e d f l o o d i n g , c o n t i n u e d dampness and s m e l l of

mold, t h e premises d e t e r i o r a t e d t o t h e e x t e n t t h a t i t was u n f i t

f o r t h e Church t o c o n t i n u e t o o p e r a t e i n t h e N o r t h S h a l l o w f o r d

Road b u i l d i n g . Danos A f f . % 21.

Hundreds o f boxes o f books o f r e l i g i o u s m a t e r i a l s were

r u i n e d by t h e wa t e r , r e n d e r i n g them u n f i t f o r r e s a l e , r e s u l t i n g

i n damage t o t h e Church i n t h e amount o f a p p r o x i m a t e l y

$50,000.00. MacKay A f f . 1 6. Water seeped i n under t h e window

( w a l l s a r e a l l g l a s s - f l o o r t o c e i l i n g ) and t h e c a r p e t wicked

t h e w a t e r midway i n t o a l l t h e rooms on t h e west s i d e o f t h e

b u i l d i n g , i n c l u d i n g a s t a f f member's o f f i c e n e x t t o t h e southwest

c o r n e r o f t h e Church b u i l d i n g . I d . a t f 7. I t t o o k days t o d r y

my o f f i c e and i t never was f r e e o f mildew s m e l l , a t l e a s t as o f

t h e d a t e t h e premises were va c a t e d . I d . a t H 8. Some of t h e

158626.1 8

m a t e r i a l s and books, w h i c h t h e Church a t t e m p t e d t o salvage and

which were moved i n t o t h e Church's c u r r e n t p r e m i s e s , caused t h e

new space t o s m e l l l i k e mold and mil d e w . 2 I d . a t f 9. Thus, the

P l a i n t i f f s ' a s s e r t i o n t h a t i t s e f f o r t t o r e s o l v e " t h i s water

i n t r u s i o n i s s u e was t i m e l y , d i l i g e n t " and t h a t t h e premises were

" f u l l y r e p a i r e d w i t h i n a few days o f b e i n g " d i s c o v e r e d " (Motion

a t p. 6) i s v i g o r o u s l y d i s p u t e d . T h i s i s s u e was never r e s o l v e d

and never a d e q u a t e l y r e p a i r e d .

I n a d d i t i o n t o f l o o d i n g problems, t h e l a n d l o r d f a i l e d t o

r e p a i r a necessary e l e v a t o r i n t h e b u i l d i n g , a l s o making t h e

Church n e a r l y u n usable by some persons. Danos A f f . f 20. The

Church o f S c i e n t o l o g y o c c u p i e d space on t h e f i r s t f l o o r o f t h e

b u i l d i n g . The second f l o o r i s a t ground l e v e l . T h e r e f o r e , one

must go down a f l i g h t o f s t a i r s o r use t h e e l e v a t o r t o access the

Church from t h e p a r k i n g l o t . The s t a i r s a r e n o t handicapped

a c c e s s i b l e . I d . a t H 22. The e l e v a t o r went o u t o f o r d e r about

f o u r (4) weeks p r i o r t o t h e Church's v a c a t i n g t h e p r o p e r t y ,

p o s s i b l y because o f t h e f l o o d i n g o r o t h e r f a i l u r e o f maintenance.

I d . a t f 23. D u r i n g t h i s t i m e , d i s a b l e d members had t o be

p h y s i c a l l y c a r r i e d down t h e s t a i r s i n t o t h e Church and back up

t h e s t a i r s t o t h e p a r k i n g l o t . I d . P l a i n t i f f s r e p e a t e d l y

2 P l a i n t i f f s have a p p a r e n t l y n o t a t t e m p t e d t o r e n t t h e premises, a s s e r t i n g t h a t t h e y need n o t do so t o m i t i g a t e t he damages. However, t h e Church i n t e n d s t o p r o v e t h a t t h e c o s t o f r e p a i r s was p r o h i b i t i v e , r e s u l t i n g i n P l a i n t i f f s ' u n f a i r l y p r o f i t i n g f rom i t s f a i l u r e t o r e p a i r .

158626.1 9

promised t o r e p a i r t h e e l e v a t o r , b u t t h e e l e v a t o r was n o t

o p e r a t i v e when t h e Church v a c a t e d t h e premises. I d . a t K 24.

The N o r t h S h a l l o w f o r d Road premises c o u l d n o t have been r e s t o r e d

t o a f i t c o n d i t i o n f o r use by t h e Church w i t h o u t a l e n g t h y

d i s r u p t i o n t o t h e a b i l i t y o f t h e Church t o p r o v i d e r e l i g i o u s

s e r v i c e s t o i t s members, i n c l u d i n g replacement o f c a r p e t s , mold

and mildew h a n d l i n g , and o t h e r r e p a i r s made necessary by t h e

water damage. I d . a t f 25. The Church o b v i o u s l y would have had

t o vacate t h e Premises i f such r e p a i r s were t o t a k e p l a c e , b u t no

o f f e r was made by t h e l a n d l o r d t o u n d e r t a k e these e x t e n s i v e

r e p a i r s - d e s p i t e i t s knowledge f o r y e a r s o f t h e e x i s t e n c e o f

damaging f l o o d s t o t h e premises. I d . a t U 26. I n any event, t h e

l a n d l o r d f a i l e d t o make such necessary r e p a i r s o v e r an extended

p e r i o d o f t i m e , e f f e c t i v e l y b r e a c h i n g t h e l e a s e .

On a n o t h e r i s s u e , P l a i n t i f f s ' a s s e r t i o n t h a t t h e Church was

not e n t i t l e d t o g i v e n o t i c e because funds were a l l e g e d l y due i s

s i m p l y n o t a c c u r a t e . The Church was c u r r e n t i n i t s r e n t payments

t o P l a i n t i f f s a t t h e t i m e i t v a c a t e d t h e premises. I d . a t K 30.

The c o n t e n t i o n o f t h e P l a i n t i f f s i s t h a t a replacement l i g h t i n g

assessment was due, n o t r e n t payments. However, t h e Church d i d

no t r e q u e s t r e p l a c e m e n t o f l i g h t i n g by P e r i m e t e r S o l u t i o n s &

Maintenance, as P l a i n t i f f s a s s e r t s was done on May 26, 2 010, and

was unaware t h a t i t would be charged f o r same. I d . a t f 29.

Moreover, t h e a l l e g e d " r e n t " due was c a l c u l a t e d u s i n g p r o j e c t e d

158626.1 10

expenses, w h i c h do n o t r e f l e c t a c t u a l expenses as r e q u i r e d by the

Commercial Lease. Exs. 2 and 3, a t t a c h e d t o A f f i d a v i t o f Carolee

Parker, Ex. 5 t o P l a i n t i f f s ' M o t i o n f o r Summary Judgment.

Because o f t h e d i f f i c u l t y i n l o c a t i n g any premises m a r g i n a l l y

a c c e p t a b l e f o r t h e r e l i g i o u s uses i n v o l v e d , t h e Church engage i n

a replacement p r o p e r t y s e a r c h and gave n o t i c e as soon as another

p r o p e r t y was l o c a t e d . Danos. A f f . ^1 27, 28.

I I . ARGUMENT AND CITATION OF LAW

A. Standard f o r Summary Judgment.

Summary judgment i s a p p r o p r i a t e o n l y when t h e c o u r t , v i e w i n g

a l l f a c t s and r e a s o n a b l e i n f e r e n c e s f r o m those f a c t s i n t h e l i g h t

most f a v o r a b l e t o nonmoving p a r t y , concludes t h a t t h e evidence

does n o t c r e a t e a t r i a b l e i s s u e as t o each e s s e n t i a l element o f

t h e movant's case. Lau's Corp., I n c . v. Haskins, 261 Ga. 491

(1991); O.C.G.A. § 9-11-56(c) (e) . Where a p a r t y o p p o s i n g summary

judgment demonstrates t h e e x i s t e n c e o f a genuine i s s u e o f

d i s p u t e d f a c t , summary judgment must be d e n i e d . c i t e .

I n t h i s case, t h e Church has p r e s e n t e d evidence e s t a b l i s h i n g

s e v e r a l m a t e r i a l q u e s t i o n s o f f a c t s :

• whether P l a i n t i f f s have s t a n d i n g t o sue,

• whether t h e Church was c o n s t r u c t i v e l y e v i c t e d ,

• whether t h e Church gave p r o p e r n o t i c e t o P l a i n t i f f s o f

i t s i n t e n t t o v a c a t e t h e premises under t h e c i r c u m s t a n c e s .

158626.1 11

T h e r e f o r e , t h i s C o u r t , v i e w i n g a l l o f t h e f a c t s and

r e a s o n a b l e i n f e r e n c e s f r o m those f a c t s i n t h e l i g h t most

f a v o r a b l e t o t h e Church, t h e nonmoving p a r t y , must deny

P l a i n t i f f s ' M o t i o n f o r Summary Judgment.

B. The Church Was C o n s t r u c t i v e l y E v i c t e d by P l a i n t i f f s ' F a i l u r e to R epair and I s Not L i a b l e to P l a i n t i f f s for Any Amount.

A defense o f c o n s t r u c t i v e e v i c t i o n f r o m r e n t e d p r o p e r t y may

be e s t a b l i s h e d by a t e n a n t , who can prove (1) t h a t t h e l a n d l o r d

whose d u t y i t was t o keep i t i n a p r o p e r s t a t e o f r e p a i r a l l o w e d

i t t o become u n t e n a n t a b l e ; and (2) t h a t i t c o u l d n o t be r e s t o r e d

t o a f i t c o n d i t i o n by o r d i n a r y r e p a i r s w i t h o u t unreasonable

i n t e r r u p t i o n o f t h e t e n a n t ' s b u s i n e s s . O v e r s t r e e t v. Rhodes,

212 Ga. 521, 523 ( 1 9 5 6 ) . A p r o v i s i o n i n a l e a s e r e q u i r i n g

w r i t t e n n o t i c e by t e n a n t t o a l a n d l o r d o f d e f e c t s , which l a n d l o r d

was bound t o r e p a i r , i s w aived by t h e l a n d l o r d when o r a l n o t i c e

o f t h e d e f e c t s i s g i v e n and t h e l a n d l o r d a c t s on such n o t i c e

e i t h e r i n whole o r i n p a r t w i t h o u t i n s i s t i n g on w r i t t e n n o t i c e .

Piano & Organ Center, I n c . v. S o u t h l a n d Bonded Warehouse, I n c . ,

139 Ga. App. 480, 481 (1976). The r u l e i s e s p e c i a l l y t r u e when

d e f e c t s a r e a c t u a l l y shown t o the l a n d l o r d o r an a u t h o r i z e d

agent. I d .

I n Piano & Organ Center, an e x t e r i o r l e a k caused f l o o d i n g of

a warehouse r e n t e d f o r t h e purpose of r e p a i r i n g and r e s t o r i n g

e l e c t r o n i c and m u s i c a l merchandise. I d . a t 480. The lease

158626.1 12

agreement r e q u i r e d t h e t e n a n t t o p r o m p t l y r e p o r t i n w r i t i n g any

d e f e c t i v e c o n d i t i o n known t o i t o r assume l i a b i l i t y i n c u r r e d due

t o t h e d e f e c t s . I d . a t 481. Each t i m e t h e w a l l l e a k e d , t h e

Piano and Organ Center o r a l l y n o t i f i e d t h e l a n d l o r d and were

assured t h a t i t would be f i x e d . However, S o u t h l a n d , t h e

l a n d l o r d , d i d n o t f i x t h e problem. I d . A f t e r s u f f e r i n g damage

t o i t s merchandise, t h e Piano and Organ Center v a c a t e d t h e

warehouse. I d . S o u t h l a n d f i l e d s u i t c l a i m i n g u n p a i d r e n t s ,

u t i l i t i e s and a t t o r n e y s f e e s t o w h i c h t h e Piano and Organ Center

a s s e r t e d t h e defense t h a t t h e premises were t o t a l l y u n t e n a n t a b l e

and d i s c h a r g e d i t o f any o b l i g a t i o n t o pay r e n t . I d .

The Court o f Appeals r e v e r s e d t h e t r i a l c o u r t ' s g r a n t o f

p a r t i a l summary judgment t o S o u t h l a n d f o r a l l amounts c l a i m e d ,

n o t i n g t h a t " [ c ] o n s t r u c t i v e e v i c t i o n i s a s p e c i a l i z e d defense i n

r e n t cases grounded on g e n e r a l p r i n c i p l e s o f c o n t r a c t law

r e s p e c t i n g f a i l u r e o f c o n s i d e r a t i o n , and may i n v o l v e e i t h e r t o t a l

o r p a r t i a l f a i l u r e o f c o n s i d e r a t i o n . I d . ( c i t i n g Wellbaum v.

Murphy, 122 Ga. App. 654, 655 ( 1 9 7 0 ) ) .

I n t h i s case, t h e Church's premises had been plagued by

f l o o d i n g f o r t h r e e (3) y e a r s . Moreover, t h e p r e v i o u s l a n d l o r d

(JK Complex) was aware o f t h e problem b e f o r e e n t e r i n g t h e l e a s e

w i t h t h e Church and had a t t e m p t e d u n s u c c e s s f u l l y o ver t h e years

t o make r e p a i r s t o s t o p t h e f l o o d i n g o f t h e premises. A l t h o u g h

t h e Church d i d n o t g i v e w r i t t e n n o t i c e o f t h i s c o n d i t i o n every

158626.1 13

time i t o c c u r r e d , i t gave o r a l n o t i c e and was assured on numerous

occasions t h a t t h e problem was " f i x e d . "

The l a t e 2009 f l o o d s and the May 2010 f l o o d were d e v a s t a t i n g

t o t h e Church, and were u t t e r l y p r e v e n t a b l e had t h e P l a i n t i f f s

m a i n t a i n e d t h e P r o p e r t y and done s i m p l y what was r e q u i r e d under

t h e l e a s e and what was promised. Many boxes o f books and

r e l i g i o u s m a t e r i a l s were damaged b y t h e f l o o d i n g , t h e c a r p e t was

soaked and mildew and odor r e s u l t e d - wh i c h was never r e c t i f i e d

w h i l e t h e Church was i n t h e premises, r e s u l t i n g i n f u r t h e r damage

i n June 2010 and t h e c l e a r message t h a t t h e l a n d l o r d would n o t

make t h e n e c e s s a r y r e p a i r s - ind e e d , i f i t was even capable o f

do i n g so w i t h o u t r e p l a c i n g t h e c a r p e t i n g and o t h e r w i s e t r e a t i n g

t h e premises f o r mildew, mold and odor. Moreover, t h e l a n d l o r d

a c t i v e l y opposed t h e Church's e f f o r t s t o p r e v e n t f u r t h e r damage

b o t h by demanding t h e sand bags be removed f r o m t h e back door and

when t h e y were n o t , c a u s i n g t h e sandbags t o be removed, which

caused f u r t h e r damage t o t h e premises and t o t h e r e l i g i o u s

a c t i v i t i e s f o r w h i c h t h e premises were l e a s e d .

The dampness and s m e l l o f mold and mildew c r e a t e d an

u n h e a l t h y e n v i r o n m e n t and i n t e r f e r e d w i t h t h e a b i l i t y o f t h e

Church members t o p r a c t i c e t h e i r r e l i g i o n i n t h e b u i l d i n g .

A d d i t i o n a l l y , t h e e l e v a t o r t o the Church's space was i n o p e r a b l e

and made i t e x t r e m e l y d i f f i c u l t f o r d i s a b l e d members t o access

the Church. A c c o r d i n g l y , t h e Church was no l o n g e r a b l e t o

158626.1 14

o p e r a t e i n t h e premises, and was f o r c e d by v i r t u e o f f a i l u r e o f

t h e l a n d l o r d t o m a i n t a i n t h e premises, t o r e l o c a t e . Under t h e

a u t h o r i t y o f O v e r s t r e e t and Piano and Organ Center, t h e evidence

shows t h a t t h e Church was c o n s t r u c t i v e l y e v i c t e d f r o m t h e

premises. T h e r e f o r e , P l a i n t i f f s a r e n o t e n t i t l e d t o summary

judgment o r an award o f u n p a i d r e n t s , u t i l i t i e s , o r a t t o r n e y s

fees f r o m t h e Church.

C. Ne i t h e r of the Named P l a i n t i f f s Have Standing to C o l l e c t Rent from the Church; Therefore P l a i n t i f f s Have Not E s t a b l i s h e d a Prima F a c i e Claim f o r Rent.

N e i t h e r o f t h e named P l a i n t i f f s have s t a n d i n g t o c o l l e c t

r e n t s . W a t e r f o r d Park, LLC never r e c e i v e d a r i g h t t o t h e leases

o r r e n t s a r i s i n g from t h e Commercial Lease. By t h e terms o f

S e c t i o n 4 o f t h e R e n t a l C e r t i f i c a t i o n and Cross I n d e m n i t y

Agreement, a l l o f t h e l e a s e s on s a i d p r o p e r t y , i n c l u d i n g t h e

Commercial Lease w i t h t h e Church, were t r a n s f e r r e d d i r e c t l y from

John Hardy Jones and M a r j o r i e K n i g h t t o PS Energy Group, I n c .

w i t h t h e express consent o f W a t e r f o r d Park, LLC (see s e c t i o n 6 ) .

W a t e r f o r d Park, LLC i s n o t e n t i t l e d t o any r e n t s f r o m t h e Church

because W a t e r f o r d Park, LLC never r e c e i v e d a r i g h t t h e r e t o and i t

consented t o t h e assignment t o PS Energy Group, I n c . t o t h e

Church's l e a s e , i n c l u d i n g t h e r e n t s a r i s i n g t h e r e f r o m .

"The r e l a t i o n s h i p o f l a n d l o r d and t e n a n t i s c r e a t e d when the

owner o f r e a l e s t a t e g r a n t s t o a n o t h e r person, who accepts such

g r a n t , t h e r i g h t s i m p l y t o possess and e n j o y t h e use o f such r e a l

158626.1 15

e s t a t e e i t h e r f o r a f i x e d t i m e o r a t t h e w i l l o f t h e g r a n t o r . "

O.C.G.A. § 44-7-1 (emphasis added). The r i g h t t o l e a s e p r o p e r t y

as a l e s s o r a r i s e s f r o m ownership o f t h e f e e s i m p l e t i t l e t o s a i d

p r o p e r t y . PS Energy Group, I n c . does n o t have f e e s i m p l e t i t l e

t o t h e p r o p e r t y , has never had f e e s i m p l e t i t l e t o s a i d p r o p e r t y ,

and, t h e r e f o r e , i s n o t e n t i t l e d t o l e a s e any p a r t o f s a i d

p r o p e r t y o r t o c o l l e c t r e n t s from Defendant.

Fee s i m p l e t i t l e t o r e a l e s t a t e v e s t s i n t h e owner a bundle

o f r i g h t s . Among t h o s e a r e t h e r i g h t t o possess and use t h e

p r o p e r t y , t o convey i t as s e c u r i t y f o r l o a n s , t o b u i l d t h e r e o n ,

and t o l e a s e t h e p r o p e r t y t o a n o t h e r . Where an owner leases

p r o p e r t y t o a n o t h e r , t h e owner has c e r t a i n r e s p o n s i b i l i t i e s t o

th e t e n a n t , i n c l u d i n g making r e p a i r s t o t h e p r o p e r t y , payment of

p r o p e r t y t a x e s , p r o t e c t i n g t h e t e n a n t from c l a i m s t o p o s s e s s i o n

from o t h e r s , l i a b i l i t y t o t h e t e n a n t f o r p e r s o n a l i n j u r i e s

s u s t a i n e d by l a t e n t d e f e c t s i n t h e p r o p e r t y . Some o f these

r e s p o n s i b i l i t i e s , such as t h a t t o pay t a x e s , may be passed on t o

the t e n a n t by t h e p r o v i s i o n s o f t h e l e a s e . O t h e r s , such as

l i a b i l i t y o f t h e owner f o r l a t e n t d e f e c t s i n t h e p r o p e r t y known

t o t h e owner b u t n o t r e v e a l e d t o t h e t e n a n t , may n o t be passed on

t o t h e t e n a n t .

I n t h i s case, W a t e r f o r d Park, LLC a t t e m p t e d t o i n s u l a t e

i t s e l f f r o m those r e s p o n s i b i l i t i e s and l i a b i l i t i e s by d i v i d i n g

t h e b u ndle o f r i g h t s between i t s e l f and PS Energy Group, LLC ("PS

158626.1 16

Energy") t h r o u g h d i r e c t conveyance from M a r j o r i e K n i g h t and John

Hardy Jones t o PS Energy Group, LLC o f t h e r i g h t s and o b l i g a t i o n s

o f l a n d l o r d . T h i s conveyance was n o t a mere assignment o f t h e

r i g h t t o PS Energy t o c o l l e c t r e n t s , b u t was an assignment o f a l l

r i g h t s and r e s p o n s i b i l i t i e s as l a n d l o r d . I f PS Energy i s

e n t i t l e d t o c o l l e c t r e n t s , those r e n t s must be f i r s t earned by PS

Energy because i t i s a l a n d l o r d . While some Georgia cases

r e c o g n i z e t h a t a t e n a n t o f p r o p e r t y may sublease p r o p e r t y and

t h e r e b y become e n t i t l e d t o r e n t s , PS Energy i s n o t t e n a n t on t h e

p r o p e r t y and has n o t h i n g t o sublease t o Defendant.

P l a i n t i f f s argue t h a t " I n o r d e r f o r t h e l a n d l o r d - t e n a n t

r e l a t i o n s h i p t o be p r e s e n t , i t i s n o t necessary t h a t t h e l a n d l o r d

be t h e t r u e owner o f t h e premises." ( c i t i n g Dawkins, Ga. L a n d l o r d

& Tenant - Breach & Remedies - W i t h Forms (2nd Ed.) § 5 - 2 ( c i t i n g

I n g o l d , I n c . v A d a i r , 247 Ga. 155 ( 1 9 8 1 ) ) . The quoted statement

s e t f o r t h i n t h e p r e c e d i n g sentence i s n o t t h e h o l d i n g i n t h a t

case. I n f a c t , n o t h i n g i n t h e I n g o l d case s u p p o r t s t h e quoted

s t a t e m e n t .

I n I n g o l d , t h e p l a i n t i f f b r o u g h t an e j e c t m e n t a c t i o n a g a i n s t

defendant i n t h e S t a t e Court o f F u l t o n County a l l e g i n g t h a t t h e

l a n d l o r d ( p l a i n t i f f ) had a p r e s e n t l y e n f o r c e a b l e l e a s e c o n t r a c t

w i t h t h e d e f e n d a n t and defendant had breached i t s lease by n o t

p a y i n g p r o p e r t y t a x e s . I d . Defendant f i l e d a m o t i o n t o d i s m i s s ,

a l l e g i n g t h a t t h e case was a "case r e s p e c t i n g t i t l e t o l a n d " so

158626.1 17

as t o d e p r i v e t h e S t a t e Court o f F u l t o n County o f s u b j e c t m a t t e r

j u r i s d i c t i o n . The t r i a l c o u r t d e n i e d t h e m o t i o n and t h e Georgia

Supreme Court a f f i r m e d t h e d e n i a l .

U n l i k e I n g o l d , t h e i n s t a n t case i s n o t an e j e c t m e n t case.

Possession i s n o t a t i s s u e . The Church v a c a t e d t h e p r o p e r t y on

August 31, 2010. As a g e n e r a l r u l e , a t e n a n t cannot d i s p u t e t h e

t i t l e t o h i s l a n d l o r d w h i l e i n p o s s e s s i o n a c q u i r e d by h i s

c o n t r a c t o f l e a s e , u n l e s s t h e t e n a n t f i r s t s u r r e n d e r s t h e

p o s s e s s i o n a c q u i r e d from him. G r i z z a r d v Roberts, 110 Ga. 41

(1900).

I f t h e l e g a l d i v i s i o n o f ownership o f t h e r e a l e s t a t e and

t h e l i a b i l i t y o f a l a n d l o r d were a l l o w e d , i t c o u l d e a s i l y become

the norm f o r t e n a n t o c c u p i e d p r o p e r t y . I n such an arrangement,

the p r o p e r t y owner, as an example a r e a l e s t a t e i n v e s t m e n t t r u s t ,

c o u l d own r e a l e s t a t e w i t h v i r t u a l l y no l i a b i l i t y t o t e n a n t s .

L i a b i l i t y t o t e n a n t s c o u l d be t r a n s f e r r e d , as here, t o a s h e l l

company t o c o l l e c t r e n t s , b u t w i t h o u t f i n a n c i a l means t o respond

i n damages t o t h e c l a i m s o f t e n a n t s and o t h e r s . Such a scheme

sh o u l d be v o i d as a g a i n s t p u b l i c p o l i c y and s h o u l d n o t be

encouraged o r countenanced by t h e C o u r t . See g e n e r a l l y O.C.G.A.

§ 13-8-2 ( c o n t r a c t s a g a i n s t p u b l i c p o l i c y ) .

A c c o r d i n g l y , t h i s Court s h o u l d f i n d t h a t P l a i n t i f f s l a c k

s t a n d i n g t o sue as s e t f o r t h h e r e i n .

158626.1 18

D. The Church I s Not L i a b l e f o r Lease Payments A r i s i n g a f t e r October 30, 2010 o r a f t e r November 23, 2010.

As s e t f o r t h above, t h e l e a s e agreement between P l a i n t i f f s

and t h e Church i s v o i d f o r f a i l u r e o f c o n s i d e r a t i o n . Moreover,

W a t e r f o r d never r e c e i v e d a r i g h t t o c o l l e c t r e n t f r o m t h e Church.

W a t e r f o r d consented t o t h e assignment t o PS Energy o f t h e

Church's l e a s e , i n c l u d i n g t h e r e n t s a r i s i n g t h e r e f r o m . PS Energy

does n o t have f e e s i m p l e t i t l e t o t h e p r o p e r t y and has never had

f e e s i m p l e t i t l e t o s a i d p r o p e r t y ; t h e r e f o r e , P l a i n t i f f s do n o t

have s t a n d i n g t o b r i n g t h i s a c t i o n .

However, even i f P l a i n t i f f s a r e found t o have s t a n d i n g and

c o u l d p r e v a i l a g a i n s t t h e Church's defense o f c o n s t r u c t i v e

e v i c t i o n , w h i c h i s t h e e q u i v a l e n t o f f a i l u r e o f c o n s i d e r a t i o n ,

i t s l i a b i l i t y w ould be l i m i t e d t o t h e 90 days n o t i c e r e q u i r e d

under t h e l e a s e . By l e t t e r d a t e d J u l y 30, 2 010, t h e Church gave

P l a i n t i f f s n o t i c e t h a t i t would v a c a t e t h e l e a s e d premises on

August 3 1 , 2010. The Church's l i a b i l i t y f o r t h e $832.20 i n v o i c e

f o r l i g h t i n g , upon w h i c h P l a i n t i f f s base t h e i r c o n t e n t i o n t h a t

t h e Church was n o t c u r r e n t on i t s payments, i s d i s p u t e d . The

Church never r e q u e s t e d replacement o f l i g h t i n g by P e r i m e t e r

S o l u t i o n s & Maintenance, w h i c h was done on May 26, 2010, and was

unaware t h a t i t would be charged f o r same.

U n l i k e t h e l e a s e i n Piedmont Center 15, LLC v. Aquent, I n c . ,

286 Ga. App. 673 (2007), c i t e d by P l a i n t i f f s , t h e i n s t a n t lease

c o n t a i n s no c a n c e l l a t i o n o p t i o n t o be p a i d w i t h i n a c e r t a i n time

158626.1 19

d u r i n g t h e l e a s e h o l d term. I t s i m p l y r e q u i r e s t h a t t h e Church be

c u r r e n t i n i t s l e a s e payments and t h a t t h e Church g i v e n i n e t y

(90) days n o t i c e o f i t s i n t e n t t o t e r m i n a t e .

I n S i r d a h v. N o r t h S p r i n g s A s s o c i a t e s , LLLP, t h e t e n a n t was

i n d e f a u l t o f i t s o b l i g a t i o n t o pay r e n t and m e r e l y r e t u r n e d the

key t o t h e l a n d l o r d and v a c a t e d t h e premises. S i r d a h does n o t

address whether S i r d a h ' s l e a s e had a p r o v i s i o n f o r t e r m i n a t i o n

such as t h e l e a s e between t h e Church and W a t e r f o r d Park, LLC.

304 Ga. App. 34 8 (2 010). The Georgia Court o f Appeals merely

h e l d t h a t : (1) l a n d l o r d d i d n o t a c c e p t t e n a n t ' s s u r r e n d e r of the

l e a s e d premises by a c c e p t i n g t h e key and was n o t r e q u i r e d t o

m i t i g a t e i t s damages by r e - l e a s i n g t h e p r e m i s e s , and (2)

a l l e g a t i o n s i n t e n a n t ' s unsworn answer were i n s u f f i c i e n t t o

c r e a t e a t r i a b l e i s s u e as t o whether t e n a n t was e n t i t l e d t o a

s e t o f f . I d .

I n t h i s case, t h e l e a s e between t h e Church and t h e l a n d l o r d ,

c o n t a i n s an e a r l y t e r m i n a t i o n p r o v i s i o n and t h e Church gave

p r o p e r n o t i c e o f i t s i n t e n t t o t e r m i n a t e t h e l e a s e . The Church's

defense o f c o n s t r u c t i v e e v i c t i o n i s s u p p o r t e d by sworn

a f f i d a v i t s , u n l i k e t h e i n s u f f i c i e n t unsworn answer i n S i r d a h .

A c c o r d i n g l y , t h e Church i s n o t l i a b l e f o r l e a s e payments f o r more

t h a n n i n e t y (90) days f r o m J u l y 30, 2010.

158626.1 20

I I I . CONCLUSION

The Church has c l e a r l y s e t f o r t h genuine i s s u e s o f d i s p u t e d

f a c t w hich may o n l y be r e s o l v e d by a t r i e r o f f a c t .

WHEREFORE t h e Church r e s p e c t f u l l y r e q u e s t s t h a t t h e Court

deny P l a i n t i f f s ' M o t i o n f o r Summary Judgment f o r t h e reasons s e t

f o r t h h e r e i n .

R e s p e c t f u l l y s u b m i t t e d ,

DILLARD & GALLOWAY, LLC

{Liu*. fjLaXuA G. Douglas D i l l a r d S t a t e Bar No. 221900 Andrea C a n t r e l l Jones S t a t e Bar No. 398440

A t t o r n e y f o r t h e Church o f S c i e n t o l o g y o f Georgia, I n c . 3 5 00 Lenox Road, N.E. S u i t e 760 A t l a n t a , Georgia 30326 (404)965-3680

158626.1 21

CERTIFICATE OF SERVICE

I hereby c e r t i f y t h a t I have t h i s day serve d a copy o f t h e

w i t h i n and f o r e g o i n g DEFENDANT'S MEMORANDUM OF LAW IN OPPOSITION

TO PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT upon a l l p a r t i e s t o

t h i s m a t t e r by d e p o s i t i n g a t r u e copy o f same i n t h e U. S. M a i l ,

p r o p e r postage p r e p a i d , addressed t o t h e p a r t i e s o f r e c o r d as

f o l l o w s :

J e f f Golomb, E s q u i r e KRAUSE GOLOMB & WITCHER, LLC 1447 Peachtree S t r e e t , NE, S u i t e 414 A t l a n t a , Ga. 3 0309

T h i s 8 t h day o f J u l y 2011.

158626.1 22