OF JUDGMENT: 04/09/2015
COUNTY CHANCERY COURT, FIRST JUDICIAL DISTRICT, J. DEWAYNE
THOMAS, TRIAL JUDGE
ATTORNEYS FOR APPELLANT: JEFFREY DALE RAWLINGS JON JERDONE
ATTORNEY FOR APPELLEE: MEL J. BREEDEN JR.
110 South Street LLC filed a complaint in the Hinds County
Chancery Court seeking damages against Atrium Gentleman's
Club Inc. (Atrium) after Atrium failed to make lease
payments. After a hearing on the matter, the chancellor
entered an order finding that Atrium owed 110 South Street
$9, 800 in back rent. The chancellor's order reflected
that the parties orally agreed that Atrium would rent the
property at a rate of $3, 500 per month and would take
possession of the property on April 1, 2014. The chancellor
found that no enforceable written lease agreement existed
between the parties since "no such document was ever
signed by both parties." The chancellor also held that
each party would be responsible for its own attorney fees.
Atrium filed a motion for reconsideration, which the
chancellor denied. 110 South Street now appeals the
chancellor's order and argues that the chancellor erred
by failing to award attorney fees and additional damages.
Atrium cross-appeals, asserting that the chancellor erred in:
(1) finding that the rental period commenced on April 1,
2014; (2) granting a lien on Atrium's personal property;
and (3) failing to order that 110 South Street return
Atrium's property. Finding no error, we affirm the
chancellor's order and judgment.
In March 2014, Ray Mallard, an agent for Atrium, contacted
110 South Street to inquire about securing a lease agreement
for the property. After negotiations, the parties agreed that
Atrium would pay $3, 500 per month to lease the property, and
Atrium would take possession of the property on April 1,
2014. However, the record reflects that Atrium never signed
or executed the proposed lease agreement. Both Atrium and
110 South Street testified that the parties agreed that
Atrium could occupy the property for forty-five days
rent-free while Atrium made some needed renovations to the
property. The parties also both testified that they agreed to
extend this rent-free period for an additional forty-five
days due to renovation delays, totaling ninety days in all.
On August 21, 2014, after Atrium failed to make lease
payments, 110 South Street filed a complaint for a temporary
restraining order (TRO), an injunction, and other relief
against Atrium, seeking damages, all sums due, injunctive
relief, and attorney fees based on the following: 110 South
Street's statutory landlord's lien; Atrium's
failure to pay past-due rent, expenses, and costs;
Atrium's failure to provide proof of insurance;
Atrium's failure to transfer utilities; and Atrium's
failure to execute a written lease agreement.
On August 27, 2014, the chancellor entered a TRO enjoining
and prohibiting Atrium from removing any property from the
premises and from entering and accessing the premises. The
hearing for the preliminary injunction was set for September
8, 2014. When Atrium failed to respond and attend the
hearing, the chancellor entered a permanent injunction on
October 3, 2014. On the same day, Atrium and 110 South Street
executed a forbearance agreement that allowed Atrium to
remain open briefly in exchange for Atrium's agreement
that it would have no defenses to the prior action filed
against it by 110 South Street.
On October 15, 2014, the chancellor entered an entry of
default against Atrium. Atrium filed its answer and motion to
set aside the entry of default and permanent injunction on
October 16, 2014. The chancellor entered an order on February
18, 2015, finding that the only remaining issues to be
determined were: (1) the amount, if any, due to 110 South
Street, (2) the items, if any, to which the landlord's
lien attached, and (3) the items, if any, to which Atrium was
The chancellor held an evidentiary hearing on these issues on
March 18, 2015. At the hearing, 110 South Street asserted
that Atrium owed it approximately $18, 000, which included
$3, 000 in attorney fees. 110 South Street based this amount
on unpaid rent and Atrium's failure to cover costs to
improve the building, which included contracted electrical
and roofing work, and installation of the sprinkler system.
110 South Street submitted that it also incurred expenses for
the electric bills and $3, 000 in losses for a metal-clad
fireproof door that was removed from the building. 110 South
Street also requested its security deposit for damages, and
all of its damages for rent for April, May, June, July,
August, and September, in addition to a lien on certain
However, at the hearing, 110 South Street testified that
although Atrium was scheduled to take possession of the
property on April 1, 2014, 110 South Street agreed to provide
a ninety-day rent-free period to Atrium due to renovations
being made to the property. 110 South Street agreed that it
was not entitled to receive rent from Atrium until June 15,
110 South Street also asserted that when it obtained
possession of the property through the injunctive action, the
contents in the premises consisted of furniture, kitchen
equipment, bar equipment, sound and light equipment, stages,
stripper poles, and televisions. The stages were permanently
mounted to the concrete floors. 110 South Street sought to
establish its lien against the personal property, primarily
against the kitchen equipment, explaining that none of the
personal property other than the kitchen equipment had any
real value to 110 South Street.
At the hearing, Atrium also acknowledged that the parties
agreed that Atrium could occupy the property starting on
April 1, 2014, but Atrium testified that the parties agreed
that Atrium would not pay rent for a forty-five-day period so
that it could make the renovations needed for its business.
At the end of the initial forty-five-day period, Atrium
stated that renovations were still ongoing; as a result,
Atrium testified that the parties agreed to extend the
rent-free period for an additional forty-five days. Atrium
testified that this rent-free period ended on June 15, 2014,
when the gentleman's club opened for business.
Atrium further testified that prior to opening for business,
110 South Street requested Specialty Electric to perform some
work on the building. Atrium claimed that it never received a
bill from 110 South Street for any work performed by
Specialty Electric, and Atrium stated that it was never
presented a bill for a fire inspection. Atrium also testified
that leaks in the roof were corrected without an agreement
between the parties as to who would pay for these repairs.
Atrium submitted that it paid the Entergy electric bills
during the renovations to the building, even though the
electricity account remained in 110 South Street's name.
Regarding 110 South Street's claim about the metal-clad
fireproof door, Atrium testified that 110 South Street
ordered that the door be placed outside of the premises,
where it later disappeared.
Both parties testified and agreed that Atrium had indeed paid
110 South Street a total of $14, 700. However, despite its
prior testimony that the rent-free period ended on June 15,
2014, 110 South Street still claimed that Atrium owed them
"[f]or April, May, June, July, August, [and] September,
[and for] the $3, 000 missing door that [Atrium] couldn't
tell [them] why [they] couldn't put back in place."
110 South Street also disputed that Atrium should receive
dollar-for-dollar credit on the $3, 500 security deposit.
The chancellor entered his opinion and order on April 9,
2015, awarding a judgment against Atrium, and in favor of 110
South Street, in the amount of $9, 800 in back rent. The
chancellor found that the parties agreed that Atrium would
rent the property from 110 South Street at a rate "of
$3, 500 per month from April 1, 2014, until the date upon
which Atrium was removed from the premises, being October 3,
2014, for a total of $24, 500." The chancellor
acknowledged that Atrium had paid a total of $14, 700 to 110
South Street in rent, and held Atrium liable for remaining
unpaid rent in the amount of $9, 800. The chancellor ordered
Atrium to pay this amount within twenty days.
The chancellor found that although Atrium took possession of
the property on April 1, 2014, Atrium failed to sign the
lease agreement. As a result, the chancellor found that no
enforceable lease agreement existed between the parties. The
chancellor granted 110 South Street a lien against
Atrium's personal property, but the chancellor explained
that the lien would be extinguished, and Atrium could recover
all personal property from the location listed on
"exhibit B, " if Atrium paid the monetary judgment
in full within twenty days. The chancellor also held that any
property considered a fixture would not be recoverable by
Atrium, and that each party would be responsible for its own
On April 17, 2015, Atrium filed a motion for a new trial,
reconsideration, or to set aside the judgment. On May 13,
2015, the chancellor entered an order denying Atrium's
motion. 110 South Street filed its appeal on June 5, 2015,
and Atrium subsequently filed its cross-appeal.
This Court employs a limited standard of review when
reviewing a chancellor's decisions. McNeil v.
Hester, 753 So.2d 1057, 1063 (¶21) (Miss. 2000).
This Court "review[s] a chancellor's decision for
abuse of discretion[, ] . . . [and we] will affirm a
chancellor's decision when it is supported by substantial
credible evidence." Venture Sales LLC v.
Perkins, 86 So.3d 910, 913 (¶11) (Miss. 2012)
(citations omitted). We only disturb the chancellor's
findings if "they are manifestly wrong or clearly
erroneous, or the chancellor applied an erroneous legal
standard." Ainsworth v. Ainsworth, 139 So.3d
761, 762 (¶3) (Miss. Ct. App. 2014). However, we review
a chancellor's conclusions of law de novo. Lowrey v.
Lowrey, 25 So.3d 274, 285 (¶26) (Miss. 2009).
I. Appeal by 110 South
The chancellor ordered each party to be responsible for its
own attorney fees, and like Judge Wilson's separate
opinion, we find no abuse of discretion by the chancellor in
denying 110 South Street's request for attorney fees
herein. See Jordan v. Fountain, 986 So.2d 1018, 1021
(¶7) (Miss. Ct. App. 2008). 110 South Street argues that
the chancellor erred in failing to award it damages and
attorney fees. 110 South Street submits that the chancellor
limited 110 South Street's damages to the total amount of
rent owed by Atrium subtracted by the amount already paid by
Atrium, amounting to a total of $9, 800. 110 South Street
argues that based on the forbearance agreement and the
presentation at the hearing of the damages incurred by 110
South Street, the chancellor should have awarded 110 South
Street actual damages in the amount of $18, 512.33, which
includes attorney fees of approximately $2, 500.
The record reflects that on October 3, 2014, Atrium executed
the forbearance agreement wherein Atrium agreed that "it
has no defenses to the action filed against it by 110 South
Street, LLC, " in exchange for 110 South Street allowing
a forbearance of the permanent injunction. 110 South Street
argues that the chancellor erred in failing to award it
damages and attorney fees because, as a matter of contract,
Atrium agreed by execution of the forbearance agreement that
it possessed no defenses to 110 South Street's complaint.
As a result, 110 South Street argues that Atrium was
contractually estopped from defending against its liability
as to 110 South Street's request for damages and attorney
fees, and estopped from arguing that the terms of the lease
agreement were not enforceable based on the fact that the
lease was never signed and executed.
Upon review, the record reflects that the forbearance
agreement provides, in pertinent part, that:
110 South Street, LLC has agreed to forbear from enforcing
the Permanent Injunction until October 4, 2014[, ] at 5:00
a.m. under certain terms and conditions. In consideration for
this agreement, Atrium . . . has agreed to the following
terms and conditions.
Atrium . . . agrees that it has no defenses to the action
filed against it by 110 South Street . . . and agrees that
the Permanent Injunction is valid and enforceable in all
respects and that 110 South Street . . . is entitled to
immediate possession of the subject premises.
the forbearance agreement failed to provide for an award of
attorney fees or an award for any special damages.
"[A]ttorney fees are a special remedy available only
when expressly provided for in either a statute or contract,
or when there is sufficient proof to award punitive
damages." Falkner v. Stubbs, 121 So.3d 899, 903
(¶15) (Miss. 2013). A forbearance agreement constitutes
a collateral agreement that must be independently binding in
its terms. See ...