{
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  "name": "MECKLENBURG COUNTY, Plaintiff v. SIMPLY FASHION STORES, LTD., Defendant",
  "name_abbreviation": "Mecklenburg County v. Simply Fashion Stores, Ltd.",
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    "judges": [
      "Judges GEER and BEASLEY concur."
    ],
    "parties": [
      "MECKLENBURG COUNTY, Plaintiff v. SIMPLY FASHION STORES, LTD., Defendant"
    ],
    "opinions": [
      {
        "text": "JACKSON, Judge.\nDefendant Simply Fashion Stores, Ltd. (\u201cSimply Fashion\u201d) appeals the trial court\u2019s 22 June 2009 order that determined nine legal issues within a condemnation suit by Mecklenburg County (\u201cthe county\u201d). For the reasons stated herein, we affirm.\nOn 8 December 2000, Simply Fashion entered into a lease agreement (\u201coriginal lease\u201d) with Freedom Mall Partners (\u201cFMP\u201d) for a period of five years with an option to extend the lease for up to two additional periods of five years each. This original lease included a termination clause, which read, in pertinent part: \u201cIn the event the mall is sold and the new owner intends to Convert the Mall to a non-retail use, after July 31, 2001, the Landlord has the option to terminate the Lease by Giving the Tenant one-hundred twenty (120) days written notice of such termination\u201d (\u201ctermination clause\u201d or \u201csection 4.01\u201d).\nOn 14 November 2001, FMP and Simply Fashion agreed to a modification of the original lease (\u201cModification I\u201d). By this Modification I, Simply Fashion relocated to a larger space within the mall and agreed to an increased rent. The agreement modified the tenancy period as follows: \u201cThe term shall be Two (2) years commencing from the possession date.\u201d Modification I also changed the option for extending the lease, providing that \u201cExtension Term(s): Shall be negotiable.\u201d Modification I provided that \u201c[a]ll other terms and conditions of the Lease (except as modified herein) shall remain in full force and effect.\u201d\nOn 14 July 2003, FMP and Simply Fashion entered into a second modification of the original lease (\u201cModification II\u201d). By this Modification II, the parties agreed to a rent increase and to extend the lease term for two years beginning 1 December 2003 and ending 30 November 2005. Modification II provided that all other conditions \u201cshall remain in full force and effect. . . .\u201d\nOn 29 January 2004, the county bought the Freedom Mall property and became the successor-in-interest to the leasehold agreements held by FMP.\nIn a letter dated 27 July 2005 (\u201clease extension letter\u201d), Simply Fashion notified the county that it was \u201cexercising [its] option to renew per the lease agreement. . . .\u201d The county signed and returned the letter indicating its agreement to an extended lease term beginning 1 December 2005 and ending 30 November 2010.\nOn 29 January 2008, the county sent a letter to Simply Fashion indicating its intent to convert the entire mall property into offices for use by the county government. The letter requested Simply Fashion to terminate its lease voluntarily. On 18 March 2008, the county\u2019s attorney sent a letter to Simply Fashion with an offer of $21,813.00 if it agreed to an early termination of the lease. Simply Fashion rejected the early termination offer. Due to a copying error making part of the original lease illegible, the county was unaware of the early termination clause contained in the original lease at the time the county made the payment offer.\nOn 12 May 2008, the county filed suit to condemn Simply Fashion\u2019s leasehold interest in the Freedom Mall property. On 22 June 2009, the trial court made findings of fact and conclusions of law as to issues other than just compensation. The trial court concluded, inter alia, that (1) the county had the right to terminate the lease with only 120 days\u2019 notice pursuant to section 4.01 of the original lease; (2) Simply Fashion did not have an option to extend the lease five additional years; (3) the doctrines of laches, waiver, estoppel, and unclean hands did not prevent the county from asserting a right to terminate nor did they allow Simply Fashion a right to extend the lease; (4) the jury would be allowed to consider the effect of the termination clause when determining just compensation; and (5) as of 12 May 2008, Simply Fashion had thirty months remaining on its leasehold. Simply Fashion appeals.\nInitially, we note that, although this appeal is interlocutory, it affects a substantial right and therefore, is properly before us.\nAn order is interlocutory when it does not dispose of the entire case but instead, leaves outstanding issues for further action at the trial level. Veazey v. Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (citing Johnson v. Roberson, 171 N.C. 194, 88 S.E. 231 (1916)), reh\u2019g denied, 232 N.C. 744, 59 S.E.2d 429 (1950). Ordinarily, when an order is interlocutory, it is not immediately appealable. Goldston v. American Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). However, we will review the trial court\u2019s order if it \u201caffects some substantial right claimed by the appellant and will work an injury to him if not corrected before an appeal from the final judgment.\u201d Veazey, 231 N.C. at 362, 57 S.E.2d at 381 (citations omitted); see also N.C. Gen. Stat. \u00a7 1-277(a) (2007) (\u201cAn appeal may be taken from every judicial order or determination of a judge of a superior or district court,... which affects a substantial right claimed in any action or proceeding].]\u201d).\n\u201c[T]his Court has held on multiple occasions that orders under N.C. Gen. Stat. \u00a7 40A-47 [determination of issues other than damages in condemnation proceedings] are immediately appealable as affecting a substantial right.\u201d City of Winston-Salem v. Slate, 185 N.C. App. 33, 37, 647 S.E.2d 643, 646 (2007) (citing Piedmont Triad Reg\u2019l Water Auth. v. Unger, 154 N.C. App. 589, 591, 572 S.E.2d 832, 834 (2002), disc. rev. denied, 357 N.C. 165, 580 S.E.2d 695 (2003)).\nHere, the order does not dispose of the entire case, as the issue of damages remains outstanding. However, as argued by Simply Fashion, the issues on appeal \u201cdirectly involve vital preliminary issues of the length of Simply Fashion\u2019s leasehold interest and the construction of the lease taken by the [c]ounty which is crucial in determining constitutionally mandated just compensation.\u201d Therefore, consistent with our case law, we hold that the trial court\u2019s order \u2014 which determines issues other than damages in a condemnation proceeding \u2014 affects a substantial right, and we review the merits of Simply Fashion\u2019s appeal.\n\u201cIt is well settled in this jurisdiction that when the trial court sits without a jury, the standard of review on appeal is whether there was competent evidence to support the trial court\u2019s findings of fact and whether its conclusions of law were proper in light of such facts.\u201d Shear v. Stevens Building Co., 107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992) (citing Chemical Realty Corp. v. Home Fed\u2019l Savings & Loan, 84 N.C. App. 27, 37, 351 S.E.2d 786, 792 (1987)). \u201cFindings of fact by the trial court in a non-jury trial have the force and effect of a jury verdict and are conclusive on appeal if there is evidence to support those findings. A trial court\u2019s conclusions of law, however, are reviewable de novo.\u201d Id. (internal citations omitted). Issues of contract interpretation are matters of law. Harris v. Ray Johnson Constr. Co., 139 N.C. App. 827, 829, 534 S.E.2d 653, 654 (2000) (citing Davison v. Duke University, 282 N.C. 676, 712, 194 S.E.2d 761, 783 (1973)).\nBecause the questions which we confront concern interpretation of the lease between the parties and are, therefore, matters of law, we review them de novo.\nSimply Fashion first argues that the trial court erred in determining that Simply Fashion had no right to extend its lease for the second term. We disagree.\nOur Supreme Court has held that, when the rental rate for a lease renewal is left to be negotiated at a future time, such a covenant is not enforceable. Idol v. Little, 100 N.C. App. 442, 445, 396 S.E.2d 632, 634 (1990) (citing Young v. Sweet, 266 N.C. 623, 625, 146 S.E.2d 669, 671 (1966)). In addition,\n\u201c[a] covenant to let the premises to the lessee at the expiration of the term without mentioning any price for which they are to be let, or to renew the lease upon such terms as may be agreed on, in neither case amounts to a covenant for renewal, but is altogether void for uncertainty.\u201d\nYoung v. Sweet, 266 N.C. 623, 625, 146 S.E.2d 669, 671 (1966) (quoting Realty Co. v. Logan, 216 N.C. 26, 28, 3 S.E.2d 280, 281 (1939)). In contrast,\nan optional renewal provision in a lease which is silent on the amount of rent due upon renewal of the lease and which does not provide that the renewal rent will be set by the parties\u2019 future agreement is valid and enforceable, and the amount of rent due upon renewal is impliedly the amount of rent due under the original lease.\nIdol, 100 N.C. App. at 445, 396 S.E.2d at 634.\nIn the case sub judice, the original lease provided for extensions of \u201cTWO (2) ADDITIONAL PERIOD(S) OF FIVE (5) YEARS EACH].]\u201d However, when the parties entered into Modification I, they agreed that the terms of the extensions \u201c]s]hall be negotiable.\u201d Even though the extension provision of the original lease would have been \u201cvalid and enforceable\u201d because it was \u201csilent on the amount of rent due upon renewal of the lease],]\u201d id., Modification I replaced that provision with an agreement \u201cto renew the lease upon such terms as may be agreed on,\u201d which \u201cis altogether void for uncertainty],]\u201d Young, 266 N.C. at 625, 146 S.E.2d at 671 (citation omitted). Therefore, the trial court properly concluded that Simply Fashion did not have the right to a second extension.\nAs part of this argument, Simply Fashion contends that the parties\u2019 conduct prior to the date of the filing of the condemnation proceeding demonstrates that they both believed that Simply Fashion had the right to extend through 2015. However \u2014 as found by the trial court \u2014 in a letter sent to Simply Fashion on 18 March '2008, the county\u2019s attorney \u201ccontradicted the express terms of the lease documents\u201d by writing that \u201c]t]he Simply Fashion lease terminates November 30, 2010, and there is one five-year option remaining thereafter.\u201d This Court has held that \u201cin cases where the language used is clear and unambiguous, construction is a matter of law for the court. In those cases, the court\u2019s only duty is to determine the legal effect of the language used and to enforce the agreement as written.\u201d Computer Sales International v. Forsyth Memorial Hospital, 112 N.C. App. 633, 634-35, 436 S.E.2d 263, 264-65 (1993) (internal citations omitted), disc. rev. denied, 335 N.C. 768, 442 S.E.2d 513 (1994). Accordingly, the plain and unambiguous language of the lease documents controls, and Simply Fashion\u2019s argument that the actions of the parties should govern is without merit.\nSecond, Simply Fashion contends that the trial court erred in determining that the county had the right to terminate the lease pursuant to the contractual termination clause, because section 4.01 applies only to the original landlord, FMP; section 4.01 applies only during the initial term of the lease and not during extensions; and equitable doctrines operate to prevent section 4.01 from being considered in calculating just compensation. We disagree.\nAs noted supra, \u201cin cases where the language used is clear and unambiguous, construction is a matter of law for the court. In those cases, the court\u2019s only duty is to determine the legal effect of the language used and to enforce the agreement as written.\u201d Id. (internal citations omitted).\nSection 4.01 of the original lease provides:\nThe Initial Term of the Lease shall commence on the Lease Commencement Date and shall continue for the number of Lease Years stated on the Face Page, unless sooner terminated in accordance with the terms hereof or extended as provided hereafter. In the event the mall is sold and the new owner intends to Convert the Mall to a non-retail use, after July 31, 2001, the Landlord has the option to terminate the Lease by Giving the Tenant one-hundred twenty (120) days written notice of such termination.\nAccording to Simply Fashion, the term \u201cLandlord[,]\u201d as used in section 4.01, describes only FMP and not the county, as FMP\u2019s successor-in-interest. However, other portions of the original lease contradict this interpretation. In section 25.06, the original lease provides:\nThis Lease and all terms, conditions and covenants herein contained, shall, subject to the provisions as to assignment, apply to and bind the parties hereto and their respective heirs, administrators, executors, successors, and assigns.\nIn addition, \u201clandlord\u201d is used in other portions of the original lease to refer to both FMP and any successors-in-interest. For example, section 18.02 provides that \u201c[i]f the Tenant is in default . . . , then Landlord . . . shall have the following rights: (1) To terminate this Lease upon (10) days\u2019 written notice to Tenant[.]\u201d Furthermore, section 4.01 would be meaningless if only FMP could exercise it \u2014 the provision only becomes effective \u201c[i]n the event the mall is sold\u201d and at that point, FMP would no longer be a party to the contract and would no longer have any rights over the tenant, including the right of termination. Therefore, the term \u201cLandlord\u201d in section 4.01 is applicable to the county, as FMP\u2019s successor-in-interest.\nSection 4.01 also applies to the extension terms as well as the initial term of the original lease. Even though section 4.01 is entitled \u201cInitial Term[,]\u201d section 25.05 specifically provides that \u201c[t]he captions or titles used throughout this Lease are for reference and convenience only and shall in no way define, limit or describe the scope or intent of this lease.\u201d The second sentence of section 4.01 does not refer to the \u201cinitial term\u201d and the only time limitation included in it is that the clause is not effective until \u201cafter July 31, 2001[.]\u201d Accordingly, no temporal constraints prevent the county from exercising the termination clause provided in section 4.01.\nFinally, equitable doctrines do not prevent the consideration of section 4.01 when a jury determines Simply Fashion\u2019s just compensation. The doctrine of laches does not apply, because Simply Fashion has neither alleged nor demonstrated that it was injured or disadvantaged by the county\u2019s failure to exercise its rights pursuant to the termination clause. See MMR Holdings, LLC v. City of Charlotte, 148 N.C. App. 208, 209-10, 558 S.E.2d 197, 198 (2001) (noting that one element of the defense of laches is that \u201cthe delay must be shown to be unreasonable and must have worked to the disadvantage, injury or prejudice of the person seeking to invoke the doctrine of lachesf.]\u201d).\nThe doctrine of waiver also does not apply in the instant case. \u201cThere can be no waiver unless so intended by one party, and so understood by the other, or one party has so acted as to mislead the other.\u201d Baysdon v. Insurance Co., 259 N.C. 181, 188, 130 S.E.2d 311, 317 (1963) (citing Manufacturing Co. v. Lefkowitz, 204 N.C. 449, 453, 168 S.E. 517, 519 (1933)). Here, the county, in its letters to Simply Fashion, did not communicate an intent to waive any rights to terminate nor did it make any reference to the termination clause whatsoever. Furthermore, Simply Fashion could not have been misled by the county\u2019s conduct, because according to Simply Fashion\u2019s interpretation of the original lease, the county never possessed a right to exercise the termination clause. Simply Fashion could not have understood the county to waive a right when it did not acknowledge that such a right existed.\nSimilarly, estoppel does not prevent section 4.01 from factoring into a just compensation determination. Among the other elements of estoppel, the party asserting the defense of estoppel must have \u201crelied upon the conduct of the party sought to be estopped to his prejudice.\u201d Hensell v. Winslow, 106 N.C. App. 285, 291, 416 S.E.2d 426, 430, disc. rev. denied, 332 N.C. 344, 421 S.E.2d 148 (1992) (emphasis added) (citation omitted). As noted supra, Simply Fashion has not shown that it relied upon any representation by the county to Simply Fashion\u2019s prejudice. Simply Fashion does not assert that it has taken any action based upon its belief that the county had chosen not to exercise a provision of the lease that Simply Fashion never considered it able to exercise. Accordingly, neither estoppel nor any other asserted equitable doctrine operates to exclude the termination clause from a calculation of the just compensation due Simply Fashion.\nSimply Fashion also attempts to use the \u201cscope of the project\u201d rule to argue that section 4.01 should not be considered when determining the amount of just compensation. This is a misinterpretation of the scope of the project rule.\nOur legislature set forth the scope of the project rule in North Carolina General Statutes, section 40A-65(a):\nThe value of the property taken, or of the entire tract if there is a partial taking, does not include an increase or decrease in value before the date of valuation that is caused by (i) the proposed improvement or project for which the property is taken; (ii) the reasonable likelihood that the property would be acquired for that improvement or project; or (iii) the condemnation proceeding in which the property is taken.\nN.C. Gen. Stat. \u00a7 40A-65(a) (2007). This rule prevents the valuation of the property for just compensation purposes from being influenced by the effects of the condemnation itself. See Raleigh-Durham Airport Authority v. King, 75 N.C. App. 57, 62, 330 S.E.2d 622, 625 (1985) (\u201cSince a property-owner cannot capitalize under the statute on any increase in the property\u2019s value due to the reasonable likelihood that it will be acquired, the condemnor likewise cannot take advantage of any resulting decrease in the property due to the threat of condemnation.\u201d).\nSimply Fashion argues that, because the termination clause is not triggered except in the event that the \u201cnew owner\u201d \u2014 here, the county \u2014 intends to use the space for a non-retail purpose and because the scope of the project rule prevents the condemnor\u2019s future use of the property from affecting the amount of just compensation, the termination clause in section 4.01 cannot be considered in valuing the property here. We hold, as did the trial court, that the scope of the project rule applies to the current set of facts. Nonetheless, this rule operates to require that the property be valued as retail space rather than government office space, which is the use intended by the county. Simply Fashion\u2019s attempt to extend the application of this rule to strike a provision from a contract \u2014 that it negotiated, to which it agreed, and which it signed \u2014 is beyond the parameters of the scope of the project rule. Accordingly, the county had the right to terminate the lease pursuant to section 4.01, and Simply Fashion\u2019s arguments to the contrary are without merit.\nBecause Simply Fashion bases its third argument \u2014 that the trial court erred in ordering that its findings of fact and conclusions of law are binding upon the parties \u2014 -upon its first two issues and because\u2014 as discussed supra \u2014 Simply Fashion does not have the right to a second extension and the county had the right to terminate the lease pursuant to the termination clause, Simply Fashion\u2019s third argument is overruled.\nFor the reasons stated, we hold that the trial court did not err in finding that Simply Fashion did not have a right to a second extension, that the county had the right to exercise the termination clause, and that the findings of fact and conclusions of law are binding upon the parties.\nAffirmed.\nJudges GEER and BEASLEY concur.",
        "type": "majority",
        "author": "JACKSON, Judge."
      }
    ],
    "attorneys": [
      "Ruff, Bond, Cobb, Wade &Bethune, LLP, by Robert S. Adden, Jr., for plaintiff-appellee.",
      "The Odom Firm, PLLC, by Thomas L. Odom, Jr. and David W. Murray, for defendant-appellant."
    ],
    "corrections": "",
    "head_matter": "MECKLENBURG COUNTY, Plaintiff v. SIMPLY FASHION STORES, LTD., Defendant\nNo. COA09-1625\n(Filed 21 December 2010)\n1. Appeal and Error\u2014 interlocutory order \u2014 substantial right \u2014damages in condemnation\nAn appeal from an interlocutory order in a condemnation case affected a substantial right and was heard where the order involved the length of a lease and the construction of the lease by the county, which were crucial to determining compensation.\n2. Appeal and Error\u2014 standard of review \u2014 condemnation\u2014 interpretation of lease\nAn appeal in a condemnation case concerned interpretation of a lease between the parties and the standard of review was de novo.\n3. Landlord and Tenant\u2014 lease \u2014 extension agreement \u2014 void for uncertainty\nThe trial court did not err in a condemnation case by determining that defendant had no right to extend its lease for a second term. Even though the extension agreement of the original lease would have been valid and enforceable, a modification was void for uncertainty because it provided that the lease would be renewed on \u201csuch terms as may be agreed on.\u201d There was no merit to the argument that the actions of the parties should govern.\n4. Landlord and Tenant\u2014 condemnation \u2014 termination clause in existing lease \u2014 applicable\nThe trial court did not err in a condemnation action by determining that the county had the right to terminate a lease pursuant to a contractual termination clause where defendant argued that the termination clause applied only to the original landlord, not the county; that it applied only during the initial term of the lease; and that it did not apply due to laches and equity.\n5. Eminent Domain\u2014 scope of project rule \u2014 applicable to value of property \u2014 not to lease provision\nThe scope of the project rule applies to determine the use for which the property is valued, not to strike a provision which defendant negotiated, agreed to, and signed.\nAppeal by defendant from order entered 22 June 2009 by Judge Robert R Johnston in Mecklenburg County Superior Court. Heard in the Court of Appeals 19 August 2010.\nRuff, Bond, Cobb, Wade &Bethune, LLP, by Robert S. Adden, Jr., for plaintiff-appellee.\nThe Odom Firm, PLLC, by Thomas L. Odom, Jr. and David W. Murray, for defendant-appellant."
  },
  "file_name": "0664-01",
  "first_page_order": 688,
  "last_page_order": 697
}
