Gilmore International Travel, Inc. v. Equitable Life Assurance Society of the United States

Sognier, Judge. Gilmore International Travel (GIT) brought suit against its lessor, The Equitable Life Assurance Society of the United States (Equitable), for fraud and breach of contract in regard to Equitable’s alleged violation of a covenant in the parties’ lease agreement that provided Equitable would not lease other premises in its complex to businesses similar to GIT. The trial court denied Equitable’s motion [117] for summary judgment as to GIT’s fraud and breach of contract counts but granted partial summary judgment to Equitable on the issue of lost profits. GIT appeals. The trial court’s order stated: “Concerning the issue of lost profits, partial summary judgment is granted to [appellee] as follows: [Appellant] will not be permitted at trial to recover from [appellee] for lost profits. However, at trial this court will consider whether evidence of lost profits, loss of good will, etc., are relevant for the limited purpose of establishing the value of the leasehold in accordance with the rule enunciated in Carusos, et al. v. Briarcliff, Inc. etc. et al., 76 Ga. App. 346 (45 S.E. 2d. 802) (1947).” 1. Appellant contends the trial court erred by ruling that appellant is precluded from recovering lost profits from appellee as a result of the alleged breach of contract. “The measure of damages recoverable for a lessor’s breach of covenant not to rent other stipulated premises for a competing business is the difference in value between the plaintiffs’ leasehold with the covenant against competition unbroken and the same leasehold with the covenant broken. The value of said leasehold is not controlled by the stipulated rental therefor, nor the profits which the tenant could have realized from the operation of his business without the adjacent competing business. However, allegations and evidence of loss of profits are material to show the damage sustained by the lessee, in accordance with the rule herein stated. [Cits.] . . . [E]vidence [of loss of profits] is admissible and pleadings in support thereof proper in order that the jury may properly estimate the value of the leasehold estate before and after the covenant is broken. Therefore, a recovery for loss of profits occasioned by a breach of contract when properly pleaded and proved may be indirectly had.” Carusos, supra at 351-352 (2). See also 49 AmJur2d, Landlord & Tenant, §§ 162; 188. We do not find appellant’s arguments seeking to distinguish the controlling language of Carusos to be persuasive. The cases cited by appellant, Bass v. Carpenter, 152 Ga. App. 298 (262 SE2d 578) (1979) and Wideman v. Selph, 71 Ga. App. 343 (1, 2) (30 SE2d 797) (1944), both involve lessees prevented by their lessors from cultivating or harvesting crops on the rental property and are thus inapposite to the case sub judice. The trial court’s grant of partial summary judgment to appellee on the issue of the recovery of lost profits as a result of the alleged breach of contract is accordingly affirmed. 2. Appellant contends the trial court erred by ruling that appellant is precluded from recovering lost profits from appellee as a result of the alleged fraud. “ ‘It may be stated as a general rule that in tort actions a recovery may be had for loss of profits, provided their loss is the proximate result of the defendant’s wrong and they can be shown with reasonable certainty. . . .’ [Cit.]” Norris v. Pig’n Whistle, 79 Ga. [118] App. 369, 373 (1) (53 SE2d 718) (1949). See also Groover v. Dickey, 173 Ga. App. 73, 75 (6) (325 SE2d 617) (1984); Cobb & Eldridge, Ga. Law of Damages (2d ed.), § 2A-8. Thus, the trial court’s ruling disallowing appellant from recovering lost profits is, as to the fraud count, erroneous as a matter of law. Appellee argues, however, that the trial court’s grant of partial summary judgment was proper because the evidence of lost profits submitted by appellant was insufficient. After finding that questions of fact exist as to appellant’s fraud count, the trial court granted partial summary judgment to appellee on the issue of lost profits, citing Carusos, supra, and reserving until trial evidentiary matters concerning the lost profits. The trial court did not explicitly address lost profits in terms of appellant’s fraud count and to the extent the order implicitly held lost profits not recoverable under the fraud count, that decision has been reversed. We see no difference in the proof necessary to ascertain lost profits to show the value of the leasehold before and after the breach of the covenant not to rent other premises to competing businesses, as required by Carusos, supra, and the proof necessary to ascertain lost profits as a result of appellee’s alleged fraudulent behavior. Since it is clear that the trial court reserved the issue of lost profits until trial as to the Carusos standard, we do not find it necessary to rule on the sufficiency of the evidence as to the appellant’s fraud count. That portion of the trial court’s order concerning lost profits pertaining to appellant’s fraud count is, accordingly, reversed. Judgment affirmed in part and reversed in part. McMurray, P. J., concurs. Beasley, J., concurs specially.