Charlotte Office Tower Associates v. Carolina SNS Corp.

EAGLES, Judge. The sole issue on appeal is whether the trial court erred in refusing to apply G.S. 42-33 to stay the order of possession. Defendants contend that application of the statute was appropriate and would have allowed defendants to maintain possession of the leased premises. We disagree and affirm. Defendants argue that Couch v. Realty Corp., 48 N.C. App. 108, 268 S.E. 2d 237 (1980), too restrictively limits application of G.S. 42-33. Defendants contend that G.S. 42-33 should apply to stay dispossession of the tenant except where the lessor has the right under the lease to terminate for nonpayment of rent and has, in fact, terminated the lease for nonpayment of rent. We disagree. [700] Here paragraph 19(b)(1) of the lease between plaintiff and Pepi’s expressly states that the “Landlord may, at its election, terminate this Lease or terminate Tenant’s right to possession only, without terminating the Lease.” The trial court found that the sublease between Pepi’s and SNS was subject to the lease between Pepi’s and plaintiff. Appellants have not excepted to this finding. We find there is competent evidence supporting the trial court’s finding and, therefore, we are bound by it. Hoover v. Crotts, 232 N.C. 617, 61 S.E. 2d 705 (1950). We note that G.S. 42-33 is to be construed in pari materia with G.S. 42-3. Ryan v. Reynolds, 190 N.C. 563, 130 S.E. 156 (1925). G.S. 42-3 applies only when a lease does not expressly provide for the landlord’s reentry upon nonpayment of rents. Id. This statute implies a forfeiture of the remainder of the term and allows the landlord to dispossess a nonpaying tenant who refuses to vacate. Id. G.S. 42-33 on the other hand, protects the tenant. In part, it provides that [i]f, in any action brought to recover the possession of demised premises upon a forfeiture for the nonpayment of rent, the tenant, before judgment given in such action, pays or tenders the rent due and the costs of the action, all further proceedings in such action shall cease. As the Ryan court indicated, this provision does not always protect the tenant. In Ryan the lease at issue did not address the forfeiture of the term due to nonpayment of rent by the lessee. Nevertheless, the court stated that “[t]he parties could have agreed in the lease upon strict terms.” Ryan, 190 N.C. at 566, 130 S.E. at 158. In Tucker v. Arrowood, 211 N.C. 118, 189 S.E. 180 (1937) (per curiam), the Supreme Court held that a previous version of G.S. 42-33 did not apply when the lease granted the lessor the option to terminate the lease upon the tenant’s nonpayment of rent. The court there stated “[i]n view of the fact that the option of the plaintiff [to terminate the lease], . . . , contained in the lease, to declare the lease forfeited had not been waived, the appellants are not entitled to the relief provided by [G.S. 42-33].” Id. at 119, 189 S.E. at 181. [701] In Couch our court applied G.S. 42-33 because there was no lease provision addressing forfeiture of the term based on the tenant’s failure to pay his rent. The court noted that G.S. 42-33 “has no application if the terms of the lease provide the lessor can terminate the lease upon nonpayment of the rent.” Couch, 48 N.C. App. at 113, 268 S.E. 2d at 241. We conclude that G.S. 42-3 and G.S. 42-33 are remedial in nature and will apply only where the parties’ lease does not cover the issue of forfeiture of the lease term upon nonpayment of rent. Where the contracting parties have considered the issue, negotiated a response, and memorialized their response within the lease, the trial court appropriately should decline to apply these statutory provisions. Here, plaintiff and Pepi’s agreed in their lease that should nonpayment of rent occur, the plaintiff could elect to terminate the lease or terminate Pepi’s right of possession. The statute has no application to this case. The judgment of the trial court is affirmed. Affirmed. Judges Cozort and Smith concur.