Neal v. Craig Brown, Inc.

356 S.E.2d 912 (1987)

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Nature of the Case

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Facts

Craig Brown, Sr. and his wife Gaynell owned real property. They entered into a written lease agreement leasing the property to 60 Minute Systems, Inc. (60 Minutes), a Florida corporation engaged in a national dry-cleaning franchise business. The term of the lease was for fifteen years, beginning upon completion of a building which D was obligated to erect as a part of the lease. According to the lease, the building was to be completed no later than 15 April 1968. The lease provided for monthly rental payments of $585.00 and contained options to extend for two successive five-year periods upon written notice of intent to exercise the option given at least 90 days prior to the expiration of the preceding term. On 30 November 1967, 60 Minutes entered into a sublease agreement with Hutchison. The sublease was to commence 1 March 1968 and run through 28 February 1983 at a monthly rental of $592.00. The sublease provided for options to renew at increased rentals for two additional five-year periods commencing 1 March 1983 and 1 March 1988. Hutchison opened a retail dry-cleaning and laundry business on the premises. 60 Minutes filed a petition for bankruptcy. On 7 December 1970, Hutchison assigned 'all of his right, title and interest' in the sublease to P, who began operating a laundry and dry-cleaning business on the premises. P was directed by the bankruptcy trustee for 60 Minutes to pay rent 'directly to the owners of the premises.' P paid monthly rent of $592.00 directly to Craig. P stated that Craig considered the sublease from 60 Minutes to Hutchison to be the contract governing his use of the premises. The lease was eventually conveyed to D. Since 1975, P has made all monthly rental payments to Ds. On 20 December 1982 P gave written notice to D that he intended to exercise the option to extend the lease for five years and that, since that time, he has paid an increased monthly rental. P had made improvements to the property, including installation of a new boiler in 1983 at a cost of approximately $6,100.00. D was aware of these improvements and never intimated to plaintiff that he was anything 'other than a long-term tenant' under the terms and provisions of the Hutchison lease agreement. D. stated that it has never received a notice of renewal from P, has never discussed an extension of any term, and has always considered P to be a tenant at will. D claimed that the increased rent payments resulted from negotiations with P, without any mention of renewal. On 19 August 1985, D notified P to vacate the premises by 1 October 1985. P remains in possession of the premises. P claimed the sublease was an assignment of the original lease. D claimed the sublease was not an assignment and that P was nothing more than a third-party sublessor. The court granted summary judgment to D and P appealed.