Lattimore v. Fisher's Food Shoppe, Inc.

EAGLES, Judge. Defendant assigns as error the trial court’s granting summary judgment to the plaintiff. Defendant contends that the lease agreement provides by its express terms that defendant has the right to unlimited successive renewals and that summary judgment in favor of plaintiff was therefore inappropriate. We agree. A motion for summary judgment is properly allowed only when there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Zimmerman v. Hogg & Allen, 286 N.C. 24, 209 S.E. 2d 795 (1974). We find the trial judge here erred in concluding as a matter of law that the lease agreement created “an absolute right in the defendant to renew said lease for one and only one renewal term of five years. . . .” North Carolina courts follow the majority view that the law does not favor perpetual leases and that the intention to create one must appear “in clear and unequivocal language.” This court has said: (A) lease will not be construed to create a right to perpetual renewal unless the language employed indicates clearly and unambiguously that it was the intention and purpose of the parties to do so. . . . Moreover, leases providing for successive renewals, without other qualifying language, will be construed as providing for but one renewal. Oglesby v. McCoy, 41 N.C. App. 735, 739, 255 S.E. 2d 773, 776, rev. denied, 298 N.C. 299, 259 S.E. 2d 301 (1979). The question before the trial judge here was whether there was clear and unambiguous language in this lease agreement indicating that the intention and purpose of the parties was to create for defendant the right to unlimited successive renewals. We hold that the language of the lease agreement clearly creates a right to unlimited successive renewals and that, therefore, summary judgment in favor of plaintiff was not appropriate. Under this lease agreement, plaintiff has no right to terminate the lease unless defendant violates any of the terms of the agreement. The language in the lease agreement providing a rent increase in successive renewal terms indicates unlimited renewals: [231] Eight Hundred ($800.00) Dollars per month, payable on the first day of each and every month, in advance, for and during the first five-year term; and for and during each successive five-year term thereafter an additional sum of One Hundred ($100.00) Dollars per month, in advance and cummulatively, [sic] for so long as this lease agreement shall continue; the intent of the agreement being that the rental shall increase by $100.00 per month each five-year term over the previous five-year term. By referring to “each successive five-year term,” instead of “the second five-year term,” in this language providing for rent increases, and by the paragraph 9 language that the lease “shall be automatically renewed for successive five-year terms . . . unless the Tenant gives to Lessor in writing notice on or before ninety (90) days prior to the end of any five-year term,” the lease agreement here clearly and unambiguously provides for automatic renewal of successive five year terms unless defendant takes affirmative action not to renew the lease. Therefore, the trial judge erred (1) in concluding, as a matter of law, that the lease agreement here was for a term of five years with an absolute right in the defendant to renew for only one renewal term and granting plaintiffs motion for summary judgment and (2) in denying defendant’s motion for summary judgment. Reverse summary judgment in favor of plaintiff and remand for entry of summary judgment in favor of defendant. Chief Judge VAUGHN and Judge BRASWELL concur.