{ "id": 8523367, "name": "NORTHSIDE STATION ASSOCIATES PARTNERSHIP v. CAROLYN MADDRY", "name_abbreviation": "Northside Station Associates Partnership v. Maddry", "decision_date": "1992-02-18", "docket_number": "No. 9110DC86", "first_page": "384", "last_page": "390", "citations": [ { "type": "official", "cite": "105 N.C. App. 384" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "148 S.E. 26", "category": "reporters:state_regional", "reporter": "S.E.", "weight": 3, "year": 1929, "pin_cites": [ { "page": "27", "parenthetical": "\"The reservation by the lessee ... of some portion of the term [is] the chief distinction between a sublease and an assignment.\"" }, { "page": "27", "parenthetical": "distinction between assignment and sublease depends solely on quantity of lessee's interest and not upon the extent of the premises transferred" } ], "opinion_index": 0 }, { "cite": "197 N.C. 168", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8627788 ], "weight": 2, "year": 1929, "pin_cites": [ { "page": "170", "parenthetical": "\"The reservation by the lessee ... of some portion of the term [is] the chief distinction between a sublease and an assignment.\"" }, { "page": "170" } ], "opinion_index": 0, "case_paths": [ "/nc/197/0168-01" ] }, { "cite": "361 S.E.2d 80", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "parenthetical": "citing with approval the distinction between sublease and assignment set forth in Hetrick, supra" } ], "opinion_index": 0 }, { "cite": "320 N.C. 794", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4725287, 4728301, 4724309, 4724830, 4729343 ], "year": 1987, "pin_cites": [ { "parenthetical": "citing with approval the distinction between sublease and assignment set forth in Hetrick, supra" } ], "opinion_index": 0, "case_paths": [ "/nc/320/0794-01", "/nc/320/0794-05", "/nc/320/0794-03", "/nc/320/0794-02", "/nc/320/0794-04" ] }, { "cite": "356 S.E.2d 912", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "915", "parenthetical": "citing with approval the distinction between sublease and assignment set forth in Hetrick, supra" } ], "opinion_index": 0 }, { "cite": "86 N.C. App. 157", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12124806 ], "year": 1987, "pin_cites": [ { "page": "162", "parenthetical": "citing with approval the distinction between sublease and assignment set forth in Hetrick, supra" } ], "opinion_index": 0, "case_paths": [ "/nc-app/86/0157-01" ] }, { "cite": "239 S.W.2d 760", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 1609238 ], "year": 1951, "opinion_index": 0, "case_paths": [ "/ark/219/0059-01" ] }, { "cite": "267 S.E.2d 685", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "opinion_index": 0 }, { "cite": "300 N.C. 374", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561700, 8561638, 8561752, 8561723, 8561662 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/nc/300/0374-03", "/nc/300/0374-01", "/nc/300/0374-05", "/nc/300/0374-04", "/nc/300/0374-02" ] }, { "cite": "263 S.E.2d 313", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "317" } ], "opinion_index": 0 }, { "cite": "45 N.C. App. 400", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8549063 ], "year": 1980, "pin_cites": [ { "page": "405-06" } ], "opinion_index": 0, "case_paths": [ "/nc-app/45/0400-01" ] }, { "cite": "176 S.E.2d 161", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1970, "pin_cites": [ { "page": "167" } ], "opinion_index": 0 }, { "cite": "277 N.C. 94", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561932 ], "year": 1970, "pin_cites": [ { "page": "105" } ], "opinion_index": 0, "case_paths": [ "/nc/277/0094-01" ] } ], "analysis": { "cardinality": 584, "char_count": 13331, "ocr_confidence": 0.762, "pagerank": { "raw": 1.1483524731070556e-07, "percentile": 0.5807680293329843 }, "sha256": "02fffdffe7c636bcacf38289ab996ef21fc895846627749d5013283ca6b7585b", "simhash": "1:6e2c4bb13fb7d9de", "word_count": 2166 }, "last_updated": "2023-07-14T19:24:40.355340+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge PARKER concurs.", "Judge WYNN concurs with separate opinion." ], "parties": [ "NORTHSIDE STATION ASSOCIATES PARTNERSHIP v. CAROLYN MADDRY" ], "opinions": [ { "text": "GREENE, Judge.\nPlaintiff appeals from an order entered 24 October 1990 dismissing plaintiff\u2019s claim against defendant on the ground that it fails to state a claim upon which relief can be granted, N.C.G.S. \u00a7 1A-1, Rule 12(b)(6) (1990).\nPlaintiff Northside Station Associates Limited Partnership (Northside) instituted this action against defendant Carolyn Maddry (Maddry) seeking past-due rent and damages related to Maddry\u2019s occupation of a rental space at a shopping center in Cary, North Carolina, of which Northside is landlord. Northside alleges that Maddry entered into an agreement entitled \u201cSublease Agreement\u201d (the Agreement) with the original tenants of the space, Stanley and Margaret Hryniuk d/b/a The Video Shoppe, and with the consent of Northside. Under the terms of the original Lease Agreement between the Hryniuks and Northside, which is attached to Northside\u2019s complaint as an exhibit, a tenant who remains in possession of the premises after the expiration of the lease and without execution of a new lease shall be deemed a tenant from month to month at a rental equal to the rental amount provided in the lease plus fifty percent of such amount.\nNorthside alleges that Maddry agreed to lease the rental space as \u201cSubtenant\u201d in accordance with the terms of the Agreement, which is also attached to Northside\u2019s complaint as an exhibit. The Agreement contains the following pertinent provisions: 1) that Subtenant agrees to lease the space \u201cupon the terms and conditions set forth in the original Lease Agreement, dated September 1, 1987, between Landlord [Northside] and Tenant [The Video Shoppe]\u201d; 2) that the \u201cSublease Agreement and underlying lease will expire at 11:59 p.m., Friday, June 30, 1989\u201d; 3) that Subtenant agrees to pay to tenant monthly rent in escalating amounts (all of which were less than the rent of $1296.25 per month specified in the original Lease Agreement); 4) that Subtenant will pay directly to Landlord Northside charges for water and sewer; and 5) that \u201cTenant, Subtenant, and Landlord agree not to divulge or discuss to any Tenant, customer or any individual, the amount of rent payments between the Tenant and Subtenant.\u201d The Agreement ends with the following \u201cSignatures of Agreement\u201d: Landlord Northside Station, by Edward C. Reeves; Tenant The Video Shoppe, by Stanley J. Hryniuk; and Subtenant The Floral Emporium, by Carolyn Mad-dry. Margaret Hryniuk did not sign the Agreement.\nNorthside alleges that it leased the space at issue to Maddry beginning on 1 February 1989 and that Northside\u2019s performance under the Agreement was rendered in a satisfactory manner. North-side further alleges that, upon expiration of the Agreement on 30 June 1989, Northside proposed a new lease to Maddry to begin on 1 July 1989, that Maddry never signed the new lease, and that, despite demands made by Northside, Maddry has refused to pay the amounts due Northside for rent and has refused to execute a new lease. Northside alleges that, under the terms of the original Lease Agreement, Maddry, by virtue of her failure to execute a new lease and her continued occupation of the premises, is deemed a tenant from month to month at a rental amount equal to the amount specified in the original Lease Agreement plus 50 percent of that amount, and that Northside is entitled to interest on the rental due and to attorney\u2019s fees.\nMaddry moved to dismiss Northside\u2019s complaint under N.C.G.S. \u00a7 1A-1, Rule 12(b)(6) (1990), which motion was granted. The trial court in its order found that the Agreement is a sublease and concluded that no privity of contract exists between Northside and Maddry and that, therefore, Maddry\u2019s motion to dismiss should be allowed.\nNorthside seeks reversal of the trial court\u2019s order and advances in this Court the following arguments: 1) that the Agreement is an assignment and not a sublease since the tenant reserved no portion of the original lease term and that, therefore, Northside has a direct action against Maddry; 2) that Maddry is liable to Northside under N.C.G.S. \u00a7 42-4 (1984), which provides that any person who occupies land of another with permission, without any express agreement for rent, is liable to the landlord for a reasonable compensation for such occupation; 3) that because Maddry agreed to lease the rental space under the terms and conditions of the original Lease Agreement, that Northside is a third party beneficiary of the Agreement, without respect to the issue of privity; 4) that Maddry is liable to Northside as a tenant at will or a tenant at sufferance; and 5) that Maddry is liable to Northside because she agreed that Northside is entitled to receive her rental payments.\nOf Northside\u2019s contentions, we address only the question of whether the claim is supported on the assignment theory, because Northside\u2019s alternative theories are not adequately alleged in its complaint. The inadequacy of the allegations results from Northside\u2019s failure to assert in its complaint the substantive elements of the law on which Northside bases these additional claims. Sutton v. Duke, 277 N.C. 94, 105, 176 S.E.2d 161, 167 (1970). For example, Northside\u2019s complaint does not properly assert a third party beneficiary theory of recovery because the complaint does not allege that the conveyance to Maddry was for the direct benefit of North-side. See United Leasing Corp. v. Miller, 45 N.C. App. 400, 405-06, 263 S.E.2d 313, 317, disc. rev. denied, 300 N.C. 374, 267 S.E.2d 685 (1980). Northside\u2019s remaining allegations are similarly deficient. Its complaint, liberally construed, gives notice only of Northside\u2019s assignment theory.\nThe dispositive issue is whether an agreement in which a co-tenant transfers his one-half undivided interest in leased premises for the balance of the original lease term, reserving no part thereof unto himself, is a sublease or an assignment.\nWe dispose at the outset of Maddry\u2019s contention that North-side\u2019s \u201crepeated allegations\u201d in its complaint that the Agreement is a sublease precludes Northside from arguing on appeal that the Agreement is an assignment. Northside makes no allegation in its complaint that the Agreement is either an assignment or a sublease \u2014 it simply refers to the Agreement by its title, \u201cSublease Agreement,\u201d and to the parties in the same manner as they are denominated in the Agreement.\nWith regard to the substantive issue of whether the Agreement is an assignment or a sublease, Maddry argues that other factors, in particular the intent of the parties, should be considered in determining whether the Agreement is an assignment or a sublease. Maddry suggests that the Agreement itself reveals that the parties intended a sublease in light of the fact that the Agreement is entitled \u201cSublease Agreement\u201d and in it Maddry is referred to as \u201cSubtenant.\u201d We are aware that some jurisdictions have held that the intent of the parties, as gathered from the document of transfer, is the determining factor in distinguishing an assignment from a sublease. See, e.g., Jaber v. Miller, 239 S.W.2d 760 (Ark. 1951); 2 Richard R. Powell, Powell on Real Property \u00a7 248[2][a] (1991). However, North Carolina and the majority of jurisdictions do not recognize this \u201cintent of the parties\u201d test. Instead, our courts have adopted the traditional \u201cbright line\u201d test for determining whether a conveyance by a tenant of leased premises is an assignment or a sublease. Under this test, a conveyance is an assignment if the tenant conveys his \u201centire interest in the premises, without retaining any reversionary interest in the term itself.\u201d Patrick K. Hetrick & James B. McLaughlin, Jr., Webster\u2019s Real Estate Law in North Carolina \u00a7 241 (3d ed. 1988) (hereinafter Hetrick). A sublease, on the other hand, is a conveyance in which the tenant retains a reversion in some portion of the original lease term, however short. Id.; see also Neal v. Craig Brown, Inc., 86 N.C. App. 157, 162, 356 S.E.2d 912, 915, disc. rev. denied, 320 N.C. 794, 361 S.E.2d 80 (1987) (citing with approval the distinction between sublease and assignment set forth in Hetrick, supra); J.D. Cornell Millinery Co. v. Little-Long Co., 197 N.C. 168, 170, 148 S.E. 26, 27 (1929) (\u201cThe reservation by the lessee ... of some portion of the term [is] the chief distinction between a sublease and an assignment.\u201d); accord 3A George W. Thompson, Thompson on Real Property \u00a7 1210 (1981) (hereinafter Thompson) (a transfer is not a subletting unless the transferor retains a reversionary interest). If the conveyance is an assignment, \u201cprivity of estate\u201d is created between the original lessor and the assignee with regard to lease covenants that run with the land, and the original lessor has a right of action directly against the assignee. Hetrick at \u00a7 241. The original lessor has no such right against a sublessee. Id.\nNorthside\u2019s complaint and accompanying exhibits reveal that Stanley Hryniuk, as co-tenant with Margaret Hryniuk in a lease with Northside which was to expire at 11:59 p.m. on 30 June 1989, transferred all of his interest in the leased premises to Maddry in an agreement which was to expire at 11:59 p.m. on 30 June 1989. In other words, Stanley Hryniuk as a co-tenant conveyed to Maddry Ms entire interest in the premises, without retaining any reversionary interest in the term itself. Where only one co-tenant of leased premises transfers his interest in the premises, and the transfer is for the balance of the term of the original lease, it is an assignment, though a partial one. Restatement (Second) of Property \u00a7 15.1 cmt. i (1977); accord Thompson at \u00a7 1219; cf. Cornell Millinery, 197 N.C. at 170, 148 S.E. at 27 (distinction between assignment and sublease depends solely on quantity of lessee\u2019s interest and not upon the extent of the premises transferred). Thus, the fact that Margaret Hryniuk did not convey her interest in the leased premises is not material to the issue of whether Stanley Hryniuk\u2019s transfer is a sublease or an assignment. Her failure to convey her interest to Maddry may, however, be material to the question of the degree of Maddry\u2019s liability to Northside. See Thompson at \u00a7 1219 (partial assignee liable to landlord for rent only in proportion to his interest in the premises).\nFor the foregoing reasons, we hold that the Agreement is a partial assignment. Therefore, privity of estate exists between Northside and Maddry, allowing Northside to assert a direct claim against Maddry on the original lease covenants that run with the land. Because payment of rent is a lease covenant that runs with the land, see Hetrick at \u00a7 251, the trial court\u2019s granting of Maddry\u2019s motion to dismiss was error.\nReversed and remanded.\nJudge PARKER concurs.\nJudge WYNN concurs with separate opinion.", "type": "majority", "author": "GREENE, Judge." }, { "text": "Judge WYNN\nconcurring.\nI agree with the majority to the extent of concluding that the complaint of the plaintiff in this action alleges that there was an assignment of the leased premises to the defendant. As such, it states a claim upon which relief can be granted, and the dismissal of this cause of action under Rule 12(b)(6) was error. Accordingly, I would not make a determination as to whether in fact this agreement was an assignment, but rather, would remand to the trial court for trial of plaintiff\u2019s alleged cause of action.", "type": "concurrence", "author": "Judge WYNN" } ], "attorneys": [ "Merriman, Nicholls & Crampton, P.A., by R. Daniel Brady, for plaintiff-appellant.", "Brady, Schilawski, Earls and Ingram, by John Randolph Ingram II, for defendant-appellee." ], "corrections": "", "head_matter": "NORTHSIDE STATION ASSOCIATES PARTNERSHIP v. CAROLYN MADDRY\nNo. 9110DC86\n(Filed 18 February 1992)\nLandlord and Tenant \u00a7 11 (NCI3d| \u2014 transfer of leasehold interest\u2014 partial assignment \u2014 privity of estate\nThe trial court erred by granting defendant\u2019s motion to dismiss under N.C.G.S. \u00a7 1A-1, Rule 12(b)(6) where plaintiffs filed an action seeking past-due rent and damages related to defendant\u2019s occupation of a rental space; plaintiffs alleged that defendant entered into an agreement entitled \u201cSublease Agreement\u201d with the original tenants for the space, the Hryniuks; and the court found in its order dismissing the action that the Agreement is a sublease and concluded that no privity of contract exists between plaintiffs and defendant. North Carolina courts have adopted the traditional \u201cbright line\u201d test for determining whether a conveyance by a tenant of leased premises is an assignment or a sublease: a conveyance is an assignment if the tenant conveys its entire interest in the premises without retaining any reversionary interest in the term itself, while a sublease is a conveyance in which the tenant retains a reversion in some portion of the original lease, however short. Here, Stanley Hryniuk conveyed to Maddry his entire interest in the premises without retaining any reversionary interest in the term itself and the transfer is an assignment, though a partial one because Margaret Hryniuk did not convey her interest in the leased premises. Privity of estate exists between plaintiff Northside and defendant Maddry, allowing Northside to assert a direct claim against Maddry on the original lease covenants that run with the land.\nAm Jur 2d, Landlord and Tenant \u00a7\u00a7 452, 463.\nJudge Wynn concurring.\nAppeal by plaintiff from order entered 24 October 1990 in WAKE County District Court by Judge Fred M. Morelock. Heard in the Court of Appeals 5 November 1991.\nMerriman, Nicholls & Crampton, P.A., by R. Daniel Brady, for plaintiff-appellant.\nBrady, Schilawski, Earls and Ingram, by John Randolph Ingram II, for defendant-appellee." }, "file_name": "0384-01", "first_page_order": 412, "last_page_order": 418 }