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Unpublished Opinion No. 2008-UP-431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.