IN THE SUPERIOR COURT OF DEKALB COUNTY

STATE OF GEORGIA

WATERFORD PARK, LLC and PS ENERGY GROUP, INC., Assignees of JK COMPLEX, LLC,

ORIGINAL P l a i n t i f f s ,

v. C I V I L ACTION F I L E NO. 10CV13242-4

CHURCH OF SCIENTOLOGY OF GEORGIA, INC., a Georgia Corporation,

Defendant.

DEFENDANT'S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

Defendant Church o f S c i e n t o l o g y o f Georgia, I n c . ( t h e

"Church") f i l e s i t s Memorandum i n Law i n O p p o s i t i o n t o

P l a i n t i f f s ' M o t i o n f o r Summary Judgment as f o l l o w s :

I . INTRODUCTION

Because o f t h e P l a i n t i f f l a n d l o r d ' s n e g l i g e n t maintenance o f

th e p r o p e r t y l e a s e d by t h e Church, and t h e r e f u s a l o f t h e

la n d l o r d / o w n e r s t o r e s o l v e p e r s i s t e n t f l o o d i n g o f t h e P r o p e r t y ,

t h e premises a t i s s u e became u n f i t f o r t h e Church t o c a r r y on i t s

a c t i v i t i e s d u r i n g t h e t e r m o f the l e a s e . A l t h o u g h many

c o m p l a i n t s were made t o t h e l a n d l o r d r e g a r d i n g t h i s c o n d i t i o n , i t

was never a d e q u a t e l y r e p a i r e d and c o n t i n u e d o v e r t i m e t o f u r t h e r

d e t e r i o r a t e t o t h e degree t h a t i t was n o t r e a s o n a b l y useable f o r

158626.1 1

t h e purposes f o r w h i c h i t was l e a s e d . F a c i n g a c l e a r breach o f

th e terms o f t h e l e a s e r e q u i r i n g t h e l a n d l o r d t o m a i n t a i n t h e

premises i n h a b i t a b l e and r e a s o n a b l e c o n d i t i o n , t h e Church

a c c o r d i n g l y sought o t h e r q u a r t e r s and p r o v i d e d r e a s o n a b l e n o t i c e

t o t h e l a n d l o r d t h a t i t was v a c a t i n g t h e premises.

The r e s o l u t i o n o f d i s p u t e d f a c t u a l a s s e r t i o n s by t h e p a r t i e s

and t h e d e t e r m i n a t i o n o f whether t h e d e f e n d a n t Church a c t e d

l a w f u l l y and r e a s o n a b l y i n v a c a t i n g t h e Premises under t h e

ci r c u m s t a n c e s , can o n l y be d e t e r m i n e d by t h e t r i e r o f f a c t .

Summary judgment s h o u l d a c c o r d i n g l y be d e n i e d .

I I . STATEMENT OF FACTS

S c i e n t o l o g y i s a wo r l d w i d e r e l i g i o u s movement w i t h m i l l i o n s

of members. I t i s comprised o f o v e r 7,000 churches, m i s s i o n s and

groups s u p p o r t i n g h u m a n i t a r i a n programs t h a t r e a c h m i l l i o n s o f

people e v e r y y e a r . The l o c a l Church o f S c i e n t o l o g y i n Georgia

m i n i s t e r s t o a l o c a l c o n g r e g a t i o n , p r o v i d i n g S c i e n t o l o g y t r a i n i n g

and c o u n s e l i n g s e r v i c e s and s e e k i n g t o d i s s e m i n a t e i t s f a i t h t o

new p r o s p e c t i v e members i n t h e community. S c i e n t o l o g y r e l i g i o u s

s e r v i c e s a r e p r o v i d e d d a i l y a t t h e Church's f a c i l i t i e s , and are

e s s e n t i a l t o t h e p r a c t i c e o f t h e r e l i g i o n . See A f f i d a v i t o f

Deborah Q. Danos f f 3, 4, a t t a c h e d t o Defendant's Response t o

P l a i n t i f f s ' Statement o f Un d i s p u t e d M a t e r i a l Facts as E x h i b i t

"A."

158626.1 2

The Church has been r e q u i r e d t o r e n t f a c i l i t i e s t o d e l i v e r

s e r v i c e s w h i l e engaged i n t h e purchase and r e n o v a t i o n and

e s t a b l i s h m e n t o f i t s own p r o p e r t y . I d . a t f 5. From September 15,

2007 t o August 31, 2010, t h e Church o p e r a t e d i n l e a s e d space a t

4480 N o r t h S h a l l o w f o r d Road, Dunwoody, Georgia ( t h e " P r o p e r t y " ) . 1

I d . a t 11 6. However, maintenance and d e s i g n problems w i t h t h e

b u i l d i n g became m a n i f e s t when heavy r a i n s caused v a r y i n g degrees

of f l o o d i n g a t t h e premises - t h e degree p r e d i c a t e d upon t h e

l e v e l o f d i s r e p a i r and t h e amount o f r a i n i n v o l v e d . I d . a t f 7.

The P r o p e r t y i s s i t u a t e d such t h a t d u r i n g r a i n s i t i s

necessary t o d i v e r t w a t e r away f r o m t h e b u i l d i n g , where i t i s

c o l l e c t e d i n a pond and pumped o u t t o a v o i d f l o o d i n g . I d . a t f

8. However, a l t h o u g h t h e f a c t was n o t d i s c l o s e d t o t h e Church

b e f o r e t h e l e a s e was s i g n e d , t h e P l a i n t i f f ' s pump system was

m a n i f e s t l y i n a d e q u a t e when t h e Church t o o k p o s s e s s i o n , i t

p r o g r e s s i v e l y f e l l i n t o f u r t h e r d i s r e p a i r and combined w i t h t h e

apparent i n a d e q u a t e d e s i g n o f t h e system, i t was u n a b l e t o

p e r f o r m i t s i n t e n d e d f u n c t i o n . I d . a t % 9. As a r e s u l t , t h e

Church b u i l d i n g e x p e r i e n c e d a number o f i n c i d e n t s o f f l o o d i n g ,

d u r i n g w h i c h w a t e r f l o w e d t h r o u g h t h e back doors o f t h e Premises.

I d . a t f 10. A f t e r f l o o d i n g o f t h e Premises i n 2008, t h e

The Church's o r i g i n a l l a n d l o r d a t 4480 N o r t h S h a l l o w f o r d Road was JK Complex, LLC. who conveyed t h e P r o p e r t y t o John Hardy Jones and M a r j o r i e K n i g h t who conveyed t h e P r o p e r t y t o P l a i n t i f f W a t e r f o r d Park, LLC on A p r i l 9, 2010.

158626.1 3

l a n d l o r d p e r f o r m e d work on t h e sump pump system and p i p e s , which

caused a temporary r e s p i t e . I d . a t f 11. However, i n o r about

May 2008, t h e b u i l d i n g f l o o d e d a g a i n . I d . a t H 12. T h i s time

Steve Rowland, t h e g e n e r a l c o n t r a c t o r f o r t h e p r o p e r t y owner,

checked and f o u n d a c o l l a p s e d p o r t i o n o f t h e t u b i n g used t o c a r r y

t h e w a t e r away fr o m t h e b u i l d i n g . I d . a t 1f 13.

Church s t a f f member K i m b e r l y Desormeaux i s aware o f a t l e a s t

f o u r (4) d i s t i n c t t i m e s i n 2009 t h a t t h e Church b u i l d i n g f l o o d e d

i n t h r o u g h t h e back door, r e q u i r i n g e x t e n s i v e c l e a n up. See

A f f i d a v i t o f K i m b e r l y Desormeaux % 3, a t t a c h e d t o Defendant's

Response t o P l a i n t i f f s ' Statement o f U n d i s p u t e d M a t e r i a l Facts as

E x h i b i t "B." The w o r s t f l o o d i n g was i n September 2009. See

A f f i d a v i t o f M e r r i k L e v e t a n H 6, a t t a c h e d t o Defendant's Response

t o P l a i n t i f f s ' Statement o f U n d i s p u t e d M a t e r i a l F a c t s as E x h i b i t

"C." A f t e r t h e w o r s t day o f f l o o d i n g , W a t e r f o r d Park's employee

t o l d Church s t a f f member t h a t t h e s p i l l w a y on t h e pond i n f r o n t

o f t h e b u i l d i n g wasn't m a i n t a i n e d w e l l enough. He s a i d t h a t the

l a n d l o r d had t o go i n and p u l l o u t t h e excess w a t e r p l a n t s t o

make i t d r a i n p r o p e r l y . I d .

E i t h e r t h i s o r o t h e r n e cessary r e p a i r s were n o t done,

however, as each t i m e i t r a i n e d h e a v i l y i n 2009 and 2010 the back

h a l l o f t h e Church would f l o o d . I d . a t 1 7. These f l o o d s

t y p i c a l l y caused rooms i n t h e Church's p a s t o r a l c o u n s e l i n g

o f f i c e s used by Church m i n i s t e r s and t h e r e l i g i o u s course room t o

158626. l 4

be f l o o d e d . I d . D e s p i t e cleanup e f f o r t s , i t would t a k e days

b e f o r e e v e r y t h i n g was d r y and the odor was o f f e n s i v e , and

p r o b a b l y t o x i c . I d . a t f f 7, 11. On a t l e a s t one o c c a s i o n , the

bottoms o f many boxes o f books and o t h e r m a t e r i a l s were soaked.

I d . a t f 8.

The l a n d l o r d c a l l e d i n a p r o f e s s i o n a l w a t e r removal s e r v i c e

f rom t i m e t o t i m e , who b r o u g h t a wet vac and would work t o p u l l

up t h e water. I d . a t 1 9. Mr. Rowland would a l s o o c c a s i o n a l l y

b r i n g i n b i g f a n s t o h e l p a l l e v i a t e t h e excess m o i s t u r e . However

t h e e f f o r t s were o n l y p a r t i a l l y e f f e c t i v e and t h e l a r g e , n o i s y

f a n s r u n n i n g i n t h e h a l l w a y near t h e course room f o r weeks were a

major d i s r u p t i o n o f t h o s e engaged i n r e l i g i o u s s e r v i c e s and

s t u d i e s a t t h e Church. I d .

The w a t e r removal p r o f e s s i o n a l i n f o r m e d Mr. Levetan, when he

commented on how bad i t was, t h a t t h i s was n o t h i n g compared t o

t h e way i t was b e f o r e ( t h e Church moved i n ) : a stream used t o r u n

from f r o n t door t o t h e back door. I d . a t 1 10. Mr. Levetan's

w i f e c o u l d n o t come i n t o t h e Church f o r s e v e r a l days due t o her

s e n s i t i v i t y t o mold and mildew. I d . a t 1 1 1 . Another Church

member and h i s w i f e d i d n o t come t o t h e Church t o s t u d y o r t o any

events f o r a w h i l e , due t o t h e mold/mildew s m e l l i n t h e course

room and t h e adverse a f f e c t on her asthma. See A f f i d a v i t o f

Debbie Benk, f H 3, 4, a t t a c h e d t o Defendant's Response t o

158626.1 5

P l a i n t i f f s ' Statement o f U n d i s p u t e d M a t e r i a l Facts as E x h i b i t

"D."

S t a f f member Susan M u l t z vacuumed up t h e water on many

occasions, when i t would r a i n d u r i n g t h e day and she was c a l l e d

t o come i n l a t e a t n i g h t on more t h a n one o c c a s i o n when no one

was a t t h e Church t o handle t h e f l o o d i n g . See A f f i d a v i t o f Susan

M u l t z % 3, a t t a c h e d t o Defendant's Response t o P l a i n t i f f s '

Statement o f U n d i s p u t e d M a t e r i a l F a c t s as E x h i b i t "E." Once when

i t f l o o d e d b a d l y , Steve Rowland, t h e g e n e r a l c o n t r a c t o r f o r t h e

b u i l d i n g s a t 4480 and 4488 N o r t h S h a l l o w f o r d Road, s a i d i t was

because t h e p i p e became u n a t t a c h e d i n t h e back o f t h e b u i l d i n g .

I d . a t f 6. A f t e r e xamining t h e p i p e , Ms. M u l t z doubted t h a t a

p i p e t h a t s m a l l would c a r r y enough w a t e r t o be e f f e c t i v e i n a

heavy r a i n . I d . I t t o o k days f o r t h e rooms t o f u l l y d r y and i t

always s m e l l e d moldy i n t h e back rooms where t h e c o u n s e l i n g i s

d e l i v e r e d . I d . a t f 7.

The Church's D i r e c t o r o f S p e c i a l A f f a i r s e x p e r i e n c e d a g r e a t

d e a l o f c o n c e r n about t h e f l o o d i n g s i n c e t h e Church never knew

when t h e r a i n w o u l d r o l l i n t h e back door. When i t r a i n e d a t

n i g h t , I w o r r i e d t h a t no one was i n t h e b u i l d i n g t o see i f i t was

f l o o d i n g and what books and m a t e r i a l s may be damaged as a r e s u l t .

Danos Dec. % 13. A d d i t i o n a l l y , I was concerned t h a t t r y i n g t o

p r o v i d e s p i r i t u a l c o u n s e l i n g i n rooms t h a t had t h e s t e n c h o f

158626.1 6

mildew would have a n e g a t i v e impact on p u b l i c r e l a t i o n s f o r t h e

Church. I d . a t % 14.

Mr. Rowland a t t e m p t e d many t i m e s t o c o r r e c t t h e problem -

r e p a i r i n g t h e pump, c l e a r i n g t h e d r a i n , c l e a r i n g a n o t h e r d r a i n ,

r e - a t t a c h i n g p i p e s - each t i m e p r o m i s i n g t h a t we would n o t f l o o d

a g a i n . Yet, t h e f l o o d i n g c o n t i n u e d . I d . a t f 15. I n h i s

a f f i d a v i t , Mr. Rowland s p e c u l a t e d t h a t t h e brok e n d r a i n

d i s c o v e r e d on May 3, 2010 may have been caused by c h i l d r e n

p l a y i n g a round t h e b u i l d i n g . However, no c h i l d r e n were ever

a l l o w e d t o p l a y i n t h e back o f t h e b u i l d i n g . There was no room

even t o w a l k t h e r e , l e t a l o n e p l a y , as t h e i v y grows t h i c k down a

h i l l r i g h t up t o t h e w a l l s o f t h e b u i l d i n g w h i c h a r e a l l g l a s s .

Desormeaux A f f . U 4.

Because t h e l a n d l o r d was i n c a p a b l e o r u n w i l l i n g t o r e s o l v e

the f l o o d i n g problem, t h e Church and i t s members bought sand bags

t o b l o c k t h e w a t e r coming i n t o t h e back door as a means o f s e l f

h e l p . I n a s u b s t a n t i a l f l o o d i n May 2010, Church members

sandbagged t h e r e a r e n t r y t o t h e Church t o keep t h e wa t e r from

r e p e a t e d l y coming i n t h e h a l l w a y , as t h e y had over some p e r i o d of

time because o f t h e l a n d l o r d ' s incompetence. See A f f i d a v i t o f

Doug MacKay K 5, a t t a c h e d t o Defendant's Response t o P l a i n t i f f s '

Statement o f U n d i s p u t e d M a t e r i a l F a c t s as E x h i b i t "F." The

sandbags were t h e Church's o n l y defense a g a i n s t t h e f l o o d i n g ,

even a f t e r i t s h a v i n g been ' f i x e d ' so many t i m e s i n t h e p a s t .

158626.1 7

Danos. A f f . f 18. However, t h e r e a r e n t r y t o t h e Church was

unusable because o f t h e sandbags and t h e p r o p e r t y manager f o r

W a t e r f o r d Park demanded t h e i r removal, s t a t i n g t h e y were

u n s i g h t l y and caused a h a z a r d on t h e s i d e w a l k . Danos A f f . % 20,

MacKay A f f . H 5. I n a t l e a s t one i n s t a n c e , t h e l a n d l o r d o r

maintenance man f o r t h e P r o p e r t y p h y s i c a l l y removed t h e sandbags

which were p r o t e c t i n g t h e b u i l d i n g , c a u s i n g f u r t h e r f l o o d i n g . I n

t h e n e x t r a i n f a l l i n June 2010, i n d e f i a n c e o f t h e l a n d l o r d ' s

improper removal, Church s t a f f r e t u r n e d t h e sandbags as t h e o n l y

defense t o t h e p e r s i s t e n t f l o o d i n g . MacKay A f f . f 5. As a

r e s u l t o f t h e r e p e a t e d f l o o d i n g , c o n t i n u e d dampness and s m e l l of

mold, t h e premises d e t e r i o r a t e d t o t h e e x t e n t t h a t i t was u n f i t

f o r t h e Church t o c o n t i n u e t o o p e r a t e i n t h e N o r t h S h a l l o w f o r d

Road b u i l d i n g . Danos A f f . % 21.

Hundreds o f boxes o f books o f r e l i g i o u s m a t e r i a l s were

r u i n e d by t h e wa t e r , r e n d e r i n g them u n f i t f o r r e s a l e , r e s u l t i n g

i n damage t o t h e Church i n t h e amount o f a p p r o x i m a t e l y

$50,000.00. MacKay A f f . 1 6. Water seeped i n under t h e window

( w a l l s a r e a l l g l a s s - f l o o r t o c e i l i n g ) and t h e c a r p e t wicked

t h e w a t e r midway i n t o a l l t h e rooms on t h e west s i d e o f t h e

b u i l d i n g , i n c l u d i n g a s t a f f member's o f f i c e n e x t t o t h e southwest

c o r n e r o f t h e Church b u i l d i n g . I d . a t f 7. I t t o o k days t o d r y

my o f f i c e and i t never was f r e e o f mildew s m e l l , a t l e a s t as o f

t h e d a t e t h e premises were va c a t e d . I d . a t H 8. Some of t h e

158626.1 8

m a t e r i a l s and books, w h i c h t h e Church a t t e m p t e d t o salvage and

which were moved i n t o t h e Church's c u r r e n t p r e m i s e s , caused t h e

new space t o s m e l l l i k e mold and mil d e w . 2 I d . a t f 9. Thus, the

P l a i n t i f f s ' a s s e r t i o n t h a t i t s e f f o r t t o r e s o l v e " t h i s water

i n t r u s i o n i s s u e was t i m e l y , d i l i g e n t " and t h a t t h e premises were

" f u l l y r e p a i r e d w i t h i n a few days o f b e i n g " d i s c o v e r e d " (Motion

a t p. 6) i s v i g o r o u s l y d i s p u t e d . T h i s i s s u e was never r e s o l v e d

and never a d e q u a t e l y r e p a i r e d .

I n a d d i t i o n t o f l o o d i n g problems, t h e l a n d l o r d f a i l e d t o

r e p a i r a necessary e l e v a t o r i n t h e b u i l d i n g , a l s o making t h e

Church n e a r l y u n usable by some persons. Danos A f f . f 20. The

Church o f S c i e n t o l o g y o c c u p i e d space on t h e f i r s t f l o o r o f t h e

b u i l d i n g . The second f l o o r i s a t ground l e v e l . T h e r e f o r e , one

must go down a f l i g h t o f s t a i r s o r use t h e e l e v a t o r t o access the

Church from t h e p a r k i n g l o t . The s t a i r s a r e n o t handicapped

a c c e s s i b l e . I d . a t H 22. The e l e v a t o r went o u t o f o r d e r about

f o u r (4) weeks p r i o r t o t h e Church's v a c a t i n g t h e p r o p e r t y ,

p o s s i b l y because o f t h e f l o o d i n g o r o t h e r f a i l u r e o f maintenance.

I d . a t f 23. D u r i n g t h i s t i m e , d i s a b l e d members had t o be

p h y s i c a l l y c a r r i e d down t h e s t a i r s i n t o t h e Church and back up

t h e s t a i r s t o t h e p a r k i n g l o t . I d . P l a i n t i f f s r e p e a t e d l y

2 P l a i n t i f f s have a p p a r e n t l y n o t a t t e m p t e d t o r e n t t h e premises, a s s e r t i n g t h a t t h e y need n o t do so t o m i t i g a t e t he damages. However, t h e Church i n t e n d s t o p r o v e t h a t t h e c o s t o f r e p a i r s was p r o h i b i t i v e , r e s u l t i n g i n P l a i n t i f f s ' u n f a i r l y p r o f i t i n g f rom i t s f a i l u r e t o r e p a i r .

158626.1 9

promised t o r e p a i r t h e e l e v a t o r , b u t t h e e l e v a t o r was n o t

o p e r a t i v e when t h e Church v a c a t e d t h e premises. I d . a t K 24.

The N o r t h S h a l l o w f o r d Road premises c o u l d n o t have been r e s t o r e d

t o a f i t c o n d i t i o n f o r use by t h e Church w i t h o u t a l e n g t h y

d i s r u p t i o n t o t h e a b i l i t y o f t h e Church t o p r o v i d e r e l i g i o u s

s e r v i c e s t o i t s members, i n c l u d i n g replacement o f c a r p e t s , mold

and mildew h a n d l i n g , and o t h e r r e p a i r s made necessary by t h e

water damage. I d . a t f 25. The Church o b v i o u s l y would have had

t o vacate t h e Premises i f such r e p a i r s were t o t a k e p l a c e , b u t no

o f f e r was made by t h e l a n d l o r d t o u n d e r t a k e these e x t e n s i v e

r e p a i r s - d e s p i t e i t s knowledge f o r y e a r s o f t h e e x i s t e n c e o f

damaging f l o o d s t o t h e premises. I d . a t U 26. I n any event, t h e

l a n d l o r d f a i l e d t o make such necessary r e p a i r s o v e r an extended

p e r i o d o f t i m e , e f f e c t i v e l y b r e a c h i n g t h e l e a s e .

On a n o t h e r i s s u e , P l a i n t i f f s ' a s s e r t i o n t h a t t h e Church was

not e n t i t l e d t o g i v e n o t i c e because funds were a l l e g e d l y due i s

s i m p l y n o t a c c u r a t e . The Church was c u r r e n t i n i t s r e n t payments

t o P l a i n t i f f s a t t h e t i m e i t v a c a t e d t h e premises. I d . a t K 30.

The c o n t e n t i o n o f t h e P l a i n t i f f s i s t h a t a replacement l i g h t i n g

assessment was due, n o t r e n t payments. However, t h e Church d i d

no t r e q u e s t r e p l a c e m e n t o f l i g h t i n g by P e r i m e t e r S o l u t i o n s &

Maintenance, as P l a i n t i f f s a s s e r t s was done on May 26, 2 010, and

was unaware t h a t i t would be charged f o r same. I d . a t f 29.

Moreover, t h e a l l e g e d " r e n t " due was c a l c u l a t e d u s i n g p r o j e c t e d

158626.1 10

expenses, w h i c h do n o t r e f l e c t a c t u a l expenses as r e q u i r e d by the

Commercial Lease. Exs. 2 and 3, a t t a c h e d t o A f f i d a v i t o f Carolee

Parker, Ex. 5 t o P l a i n t i f f s ' M o t i o n f o r Summary Judgment.

Because o f t h e d i f f i c u l t y i n l o c a t i n g any premises m a r g i n a l l y

a c c e p t a b l e f o r t h e r e l i g i o u s uses i n v o l v e d , t h e Church engage i n

a replacement p r o p e r t y s e a r c h and gave n o t i c e as soon as another

p r o p e r t y was l o c a t e d . Danos. A f f . ^1 27, 28.

I I . ARGUMENT AND CITATION OF LAW

A. Standard f o r Summary Judgment.

Summary judgment i s a p p r o p r i a t e o n l y when t h e c o u r t , v i e w i n g

a l l f a c t s and r e a s o n a b l e i n f e r e n c e s f r o m those f a c t s i n t h e l i g h t

most f a v o r a b l e t o nonmoving p a r t y , concludes t h a t t h e evidence

does n o t c r e a t e a t r i a b l e i s s u e as t o each e s s e n t i a l element o f

t h e movant's case. Lau's Corp., I n c . v. Haskins, 261 Ga. 491

(1991); O.C.G.A. § 9-11-56(c) (e) . Where a p a r t y o p p o s i n g summary

judgment demonstrates t h e e x i s t e n c e o f a genuine i s s u e o f

d i s p u t e d f a c t , summary judgment must be d e n i e d . c i t e .

I n t h i s case, t h e Church has p r e s e n t e d evidence e s t a b l i s h i n g

s e v e r a l m a t e r i a l q u e s t i o n s o f f a c t s :

• whether P l a i n t i f f s have s t a n d i n g t o sue,

• whether t h e Church was c o n s t r u c t i v e l y e v i c t e d ,

• whether t h e Church gave p r o p e r n o t i c e t o P l a i n t i f f s o f

i t s i n t e n t t o v a c a t e t h e premises under t h e c i r c u m s t a n c e s .

158626.1 11

T h e r e f o r e , t h i s C o u r t , v i e w i n g a l l o f t h e f a c t s and

r e a s o n a b l e i n f e r e n c e s f r o m those f a c t s i n t h e l i g h t most

f a v o r a b l e t o t h e Church, t h e nonmoving p a r t y , must deny

P l a i n t i f f s ' M o t i o n f o r Summary Judgment.

B. The Church Was C o n s t r u c t i v e l y E v i c t e d by P l a i n t i f f s ' F a i l u r e to R epair and I s Not L i a b l e to P l a i n t i f f s for Any Amount.

A defense o f c o n s t r u c t i v e e v i c t i o n f r o m r e n t e d p r o p e r t y may

be e s t a b l i s h e d by a t e n a n t , who can prove (1) t h a t t h e l a n d l o r d

whose d u t y i t was t o keep i t i n a p r o p e r s t a t e o f r e p a i r a l l o w e d

i t t o become u n t e n a n t a b l e ; and (2) t h a t i t c o u l d n o t be r e s t o r e d

t o a f i t c o n d i t i o n by o r d i n a r y r e p a i r s w i t h o u t unreasonable

i n t e r r u p t i o n o f t h e t e n a n t ' s b u s i n e s s . O v e r s t r e e t v. Rhodes,

212 Ga. 521, 523 ( 1 9 5 6 ) . A p r o v i s i o n i n a l e a s e r e q u i r i n g

w r i t t e n n o t i c e by t e n a n t t o a l a n d l o r d o f d e f e c t s , which l a n d l o r d

was bound t o r e p a i r , i s w aived by t h e l a n d l o r d when o r a l n o t i c e

o f t h e d e f e c t s i s g i v e n and t h e l a n d l o r d a c t s on such n o t i c e

e i t h e r i n whole o r i n p a r t w i t h o u t i n s i s t i n g on w r i t t e n n o t i c e .

Piano & Organ Center, I n c . v. S o u t h l a n d Bonded Warehouse, I n c . ,

139 Ga. App. 480, 481 (1976). The r u l e i s e s p e c i a l l y t r u e when

d e f e c t s a r e a c t u a l l y shown t o the l a n d l o r d o r an a u t h o r i z e d

agent. I d .

I n Piano & Organ Center, an e x t e r i o r l e a k caused f l o o d i n g of

a warehouse r e n t e d f o r t h e purpose of r e p a i r i n g and r e s t o r i n g

e l e c t r o n i c and m u s i c a l merchandise. I d . a t 480. The lease

158626.1 12

agreement r e q u i r e d t h e t e n a n t t o p r o m p t l y r e p o r t i n w r i t i n g any

d e f e c t i v e c o n d i t i o n known t o i t o r assume l i a b i l i t y i n c u r r e d due

t o t h e d e f e c t s . I d . a t 481. Each t i m e t h e w a l l l e a k e d , t h e

Piano and Organ Center o r a l l y n o t i f i e d t h e l a n d l o r d and were

assured t h a t i t would be f i x e d . However, S o u t h l a n d , t h e

l a n d l o r d , d i d n o t f i x t h e problem. I d . A f t e r s u f f e r i n g damage

t o i t s merchandise, t h e Piano and Organ Center v a c a t e d t h e

warehouse. I d . S o u t h l a n d f i l e d s u i t c l a i m i n g u n p a i d r e n t s ,

u t i l i t i e s and a t t o r n e y s f e e s t o w h i c h t h e Piano and Organ Center

a s s e r t e d t h e defense t h a t t h e premises were t o t a l l y u n t e n a n t a b l e

and d i s c h a r g e d i t o f any o b l i g a t i o n t o pay r e n t . I d .

The Court o f Appeals r e v e r s e d t h e t r i a l c o u r t ' s g r a n t o f

p a r t i a l summary judgment t o S o u t h l a n d f o r a l l amounts c l a i m e d ,

n o t i n g t h a t " [ c ] o n s t r u c t i v e e v i c t i o n i s a s p e c i a l i z e d defense i n

r e n t cases grounded on g e n e r a l p r i n c i p l e s o f c o n t r a c t law

r e s p e c t i n g f a i l u r e o f c o n s i d e r a t i o n , and may i n v o l v e e i t h e r t o t a l

o r p a r t i a l f a i l u r e o f c o n s i d e r a t i o n . I d . ( c i t i n g Wellbaum v.

Murphy, 122 Ga. App. 654, 655 ( 1 9 7 0 ) ) .

I n t h i s case, t h e Church's premises had been plagued by

f l o o d i n g f o r t h r e e (3) y e a r s . Moreover, t h e p r e v i o u s l a n d l o r d

(JK Complex) was aware o f t h e problem b e f o r e e n t e r i n g t h e l e a s e

w i t h t h e Church and had a t t e m p t e d u n s u c c e s s f u l l y o ver t h e years

t o make r e p a i r s t o s t o p t h e f l o o d i n g o f t h e premises. A l t h o u g h

t h e Church d i d n o t g i v e w r i t t e n n o t i c e o f t h i s c o n d i t i o n every

158626.1 13

time i t o c c u r r e d , i t gave o r a l n o t i c e and was assured on numerous

occasions t h a t t h e problem was " f i x e d . "

The l a t e 2009 f l o o d s and the May 2010 f l o o d were d e v a s t a t i n g

t o t h e Church, and were u t t e r l y p r e v e n t a b l e had t h e P l a i n t i f f s

m a i n t a i n e d t h e P r o p e r t y and done s i m p l y what was r e q u i r e d under

t h e l e a s e and what was promised. Many boxes o f books and

r e l i g i o u s m a t e r i a l s were damaged b y t h e f l o o d i n g , t h e c a r p e t was

soaked and mildew and odor r e s u l t e d - wh i c h was never r e c t i f i e d

w h i l e t h e Church was i n t h e premises, r e s u l t i n g i n f u r t h e r damage

i n June 2010 and t h e c l e a r message t h a t t h e l a n d l o r d would n o t

make t h e n e c e s s a r y r e p a i r s - ind e e d , i f i t was even capable o f

do i n g so w i t h o u t r e p l a c i n g t h e c a r p e t i n g and o t h e r w i s e t r e a t i n g

t h e premises f o r mildew, mold and odor. Moreover, t h e l a n d l o r d

a c t i v e l y opposed t h e Church's e f f o r t s t o p r e v e n t f u r t h e r damage

b o t h by demanding t h e sand bags be removed f r o m t h e back door and

when t h e y were n o t , c a u s i n g t h e sandbags t o be removed, which

caused f u r t h e r damage t o t h e premises and t o t h e r e l i g i o u s

a c t i v i t i e s f o r w h i c h t h e premises were l e a s e d .

The dampness and s m e l l o f mold and mildew c r e a t e d an

u n h e a l t h y e n v i r o n m e n t and i n t e r f e r e d w i t h t h e a b i l i t y o f t h e

Church members t o p r a c t i c e t h e i r r e l i g i o n i n t h e b u i l d i n g .

A d d i t i o n a l l y , t h e e l e v a t o r t o the Church's space was i n o p e r a b l e

and made i t e x t r e m e l y d i f f i c u l t f o r d i s a b l e d members t o access

the Church. A c c o r d i n g l y , t h e Church was no l o n g e r a b l e t o

158626.1 14

o p e r a t e i n t h e premises, and was f o r c e d by v i r t u e o f f a i l u r e o f

t h e l a n d l o r d t o m a i n t a i n t h e premises, t o r e l o c a t e . Under t h e

a u t h o r i t y o f O v e r s t r e e t and Piano and Organ Center, t h e evidence

shows t h a t t h e Church was c o n s t r u c t i v e l y e v i c t e d f r o m t h e

premises. T h e r e f o r e , P l a i n t i f f s a r e n o t e n t i t l e d t o summary

judgment o r an award o f u n p a i d r e n t s , u t i l i t i e s , o r a t t o r n e y s

fees f r o m t h e Church.

C. Ne i t h e r of the Named P l a i n t i f f s Have Standing to C o l l e c t Rent from the Church; Therefore P l a i n t i f f s Have Not E s t a b l i s h e d a Prima F a c i e Claim f o r Rent.

N e i t h e r o f t h e named P l a i n t i f f s have s t a n d i n g t o c o l l e c t

r e n t s . W a t e r f o r d Park, LLC never r e c e i v e d a r i g h t t o t h e leases

o r r e n t s a r i s i n g from t h e Commercial Lease. By t h e terms o f

S e c t i o n 4 o f t h e R e n t a l C e r t i f i c a t i o n and Cross I n d e m n i t y

Agreement, a l l o f t h e l e a s e s on s a i d p r o p e r t y , i n c l u d i n g t h e

Commercial Lease w i t h t h e Church, were t r a n s f e r r e d d i r e c t l y from

John Hardy Jones and M a r j o r i e K n i g h t t o PS Energy Group, I n c .

w i t h t h e express consent o f W a t e r f o r d Park, LLC (see s e c t i o n 6 ) .

W a t e r f o r d Park, LLC i s n o t e n t i t l e d t o any r e n t s f r o m t h e Church

because W a t e r f o r d Park, LLC never r e c e i v e d a r i g h t t h e r e t o and i t

consented t o t h e assignment t o PS Energy Group, I n c . t o t h e

Church's l e a s e , i n c l u d i n g t h e r e n t s a r i s i n g t h e r e f r o m .

"The r e l a t i o n s h i p o f l a n d l o r d and t e n a n t i s c r e a t e d when the

owner o f r e a l e s t a t e g r a n t s t o a n o t h e r person, who accepts such

g r a n t , t h e r i g h t s i m p l y t o possess and e n j o y t h e use o f such r e a l

158626.1 15

e s t a t e e i t h e r f o r a f i x e d t i m e o r a t t h e w i l l o f t h e g r a n t o r . "

O.C.G.A. § 44-7-1 (emphasis added). The r i g h t t o l e a s e p r o p e r t y

as a l e s s o r a r i s e s f r o m ownership o f t h e f e e s i m p l e t i t l e t o s a i d

p r o p e r t y . PS Energy Group, I n c . does n o t have f e e s i m p l e t i t l e

t o t h e p r o p e r t y , has never had f e e s i m p l e t i t l e t o s a i d p r o p e r t y ,

and, t h e r e f o r e , i s n o t e n t i t l e d t o l e a s e any p a r t o f s a i d

p r o p e r t y o r t o c o l l e c t r e n t s from Defendant.

Fee s i m p l e t i t l e t o r e a l e s t a t e v e s t s i n t h e owner a bundle

o f r i g h t s . Among t h o s e a r e t h e r i g h t t o possess and use t h e

p r o p e r t y , t o convey i t as s e c u r i t y f o r l o a n s , t o b u i l d t h e r e o n ,

and t o l e a s e t h e p r o p e r t y t o a n o t h e r . Where an owner leases

p r o p e r t y t o a n o t h e r , t h e owner has c e r t a i n r e s p o n s i b i l i t i e s t o

th e t e n a n t , i n c l u d i n g making r e p a i r s t o t h e p r o p e r t y , payment of

p r o p e r t y t a x e s , p r o t e c t i n g t h e t e n a n t from c l a i m s t o p o s s e s s i o n

from o t h e r s , l i a b i l i t y t o t h e t e n a n t f o r p e r s o n a l i n j u r i e s

s u s t a i n e d by l a t e n t d e f e c t s i n t h e p r o p e r t y . Some o f these

r e s p o n s i b i l i t i e s , such as t h a t t o pay t a x e s , may be passed on t o

the t e n a n t by t h e p r o v i s i o n s o f t h e l e a s e . O t h e r s , such as

l i a b i l i t y o f t h e owner f o r l a t e n t d e f e c t s i n t h e p r o p e r t y known

t o t h e owner b u t n o t r e v e a l e d t o t h e t e n a n t , may n o t be passed on

t o t h e t e n a n t .

I n t h i s case, W a t e r f o r d Park, LLC a t t e m p t e d t o i n s u l a t e

i t s e l f f r o m those r e s p o n s i b i l i t i e s and l i a b i l i t i e s by d i v i d i n g

t h e b u ndle o f r i g h t s between i t s e l f and PS Energy Group, LLC ("PS

158626.1 16

Energy") t h r o u g h d i r e c t conveyance from M a r j o r i e K n i g h t and John

Hardy Jones t o PS Energy Group, LLC o f t h e r i g h t s and o b l i g a t i o n s

o f l a n d l o r d . T h i s conveyance was n o t a mere assignment o f t h e

r i g h t t o PS Energy t o c o l l e c t r e n t s , b u t was an assignment o f a l l

r i g h t s and r e s p o n s i b i l i t i e s as l a n d l o r d . I f PS Energy i s

e n t i t l e d t o c o l l e c t r e n t s , those r e n t s must be f i r s t earned by PS

Energy because i t i s a l a n d l o r d . While some Georgia cases

r e c o g n i z e t h a t a t e n a n t o f p r o p e r t y may sublease p r o p e r t y and

t h e r e b y become e n t i t l e d t o r e n t s , PS Energy i s n o t t e n a n t on t h e

p r o p e r t y and has n o t h i n g t o sublease t o Defendant.

P l a i n t i f f s argue t h a t " I n o r d e r f o r t h e l a n d l o r d - t e n a n t

r e l a t i o n s h i p t o be p r e s e n t , i t i s n o t necessary t h a t t h e l a n d l o r d

be t h e t r u e owner o f t h e premises." ( c i t i n g Dawkins, Ga. L a n d l o r d

& Tenant - Breach & Remedies - W i t h Forms (2nd Ed.) § 5 - 2 ( c i t i n g

I n g o l d , I n c . v A d a i r , 247 Ga. 155 ( 1 9 8 1 ) ) . The quoted statement

s e t f o r t h i n t h e p r e c e d i n g sentence i s n o t t h e h o l d i n g i n t h a t

case. I n f a c t , n o t h i n g i n t h e I n g o l d case s u p p o r t s t h e quoted

s t a t e m e n t .

I n I n g o l d , t h e p l a i n t i f f b r o u g h t an e j e c t m e n t a c t i o n a g a i n s t

defendant i n t h e S t a t e Court o f F u l t o n County a l l e g i n g t h a t t h e

l a n d l o r d ( p l a i n t i f f ) had a p r e s e n t l y e n f o r c e a b l e l e a s e c o n t r a c t

w i t h t h e d e f e n d a n t and defendant had breached i t s lease by n o t

p a y i n g p r o p e r t y t a x e s . I d . Defendant f i l e d a m o t i o n t o d i s m i s s ,

a l l e g i n g t h a t t h e case was a "case r e s p e c t i n g t i t l e t o l a n d " so

158626.1 17

as t o d e p r i v e t h e S t a t e Court o f F u l t o n County o f s u b j e c t m a t t e r

j u r i s d i c t i o n . The t r i a l c o u r t d e n i e d t h e m o t i o n and t h e Georgia

Supreme Court a f f i r m e d t h e d e n i a l .

U n l i k e I n g o l d , t h e i n s t a n t case i s n o t an e j e c t m e n t case.

Possession i s n o t a t i s s u e . The Church v a c a t e d t h e p r o p e r t y on

August 31, 2010. As a g e n e r a l r u l e , a t e n a n t cannot d i s p u t e t h e

t i t l e t o h i s l a n d l o r d w h i l e i n p o s s e s s i o n a c q u i r e d by h i s

c o n t r a c t o f l e a s e , u n l e s s t h e t e n a n t f i r s t s u r r e n d e r s t h e

p o s s e s s i o n a c q u i r e d from him. G r i z z a r d v Roberts, 110 Ga. 41

(1900).

I f t h e l e g a l d i v i s i o n o f ownership o f t h e r e a l e s t a t e and

t h e l i a b i l i t y o f a l a n d l o r d were a l l o w e d , i t c o u l d e a s i l y become

the norm f o r t e n a n t o c c u p i e d p r o p e r t y . I n such an arrangement,

the p r o p e r t y owner, as an example a r e a l e s t a t e i n v e s t m e n t t r u s t ,

c o u l d own r e a l e s t a t e w i t h v i r t u a l l y no l i a b i l i t y t o t e n a n t s .

L i a b i l i t y t o t e n a n t s c o u l d be t r a n s f e r r e d , as here, t o a s h e l l

company t o c o l l e c t r e n t s , b u t w i t h o u t f i n a n c i a l means t o respond

i n damages t o t h e c l a i m s o f t e n a n t s and o t h e r s . Such a scheme

sh o u l d be v o i d as a g a i n s t p u b l i c p o l i c y and s h o u l d n o t be

encouraged o r countenanced by t h e C o u r t . See g e n e r a l l y O.C.G.A.

§ 13-8-2 ( c o n t r a c t s a g a i n s t p u b l i c p o l i c y ) .

A c c o r d i n g l y , t h i s Court s h o u l d f i n d t h a t P l a i n t i f f s l a c k

s t a n d i n g t o sue as s e t f o r t h h e r e i n .

158626.1 18

D. The Church I s Not L i a b l e f o r Lease Payments A r i s i n g a f t e r October 30, 2010 o r a f t e r November 23, 2010.

As s e t f o r t h above, t h e l e a s e agreement between P l a i n t i f f s

and t h e Church i s v o i d f o r f a i l u r e o f c o n s i d e r a t i o n . Moreover,

W a t e r f o r d never r e c e i v e d a r i g h t t o c o l l e c t r e n t f r o m t h e Church.

W a t e r f o r d consented t o t h e assignment t o PS Energy o f t h e

Church's l e a s e , i n c l u d i n g t h e r e n t s a r i s i n g t h e r e f r o m . PS Energy

does n o t have f e e s i m p l e t i t l e t o t h e p r o p e r t y and has never had

f e e s i m p l e t i t l e t o s a i d p r o p e r t y ; t h e r e f o r e , P l a i n t i f f s do n o t

have s t a n d i n g t o b r i n g t h i s a c t i o n .

However, even i f P l a i n t i f f s a r e found t o have s t a n d i n g and

c o u l d p r e v a i l a g a i n s t t h e Church's defense o f c o n s t r u c t i v e

e v i c t i o n , w h i c h i s t h e e q u i v a l e n t o f f a i l u r e o f c o n s i d e r a t i o n ,

i t s l i a b i l i t y w ould be l i m i t e d t o t h e 90 days n o t i c e r e q u i r e d

under t h e l e a s e . By l e t t e r d a t e d J u l y 30, 2 010, t h e Church gave

P l a i n t i f f s n o t i c e t h a t i t would v a c a t e t h e l e a s e d premises on

August 3 1 , 2010. The Church's l i a b i l i t y f o r t h e $832.20 i n v o i c e

f o r l i g h t i n g , upon w h i c h P l a i n t i f f s base t h e i r c o n t e n t i o n t h a t

t h e Church was n o t c u r r e n t on i t s payments, i s d i s p u t e d . The

Church never r e q u e s t e d replacement o f l i g h t i n g by P e r i m e t e r

S o l u t i o n s & Maintenance, w h i c h was done on May 26, 2010, and was

unaware t h a t i t would be charged f o r same.

U n l i k e t h e l e a s e i n Piedmont Center 15, LLC v. Aquent, I n c . ,

286 Ga. App. 673 (2007), c i t e d by P l a i n t i f f s , t h e i n s t a n t lease

c o n t a i n s no c a n c e l l a t i o n o p t i o n t o be p a i d w i t h i n a c e r t a i n time

158626.1 19

d u r i n g t h e l e a s e h o l d term. I t s i m p l y r e q u i r e s t h a t t h e Church be

c u r r e n t i n i t s l e a s e payments and t h a t t h e Church g i v e n i n e t y

(90) days n o t i c e o f i t s i n t e n t t o t e r m i n a t e .

I n S i r d a h v. N o r t h S p r i n g s A s s o c i a t e s , LLLP, t h e t e n a n t was

i n d e f a u l t o f i t s o b l i g a t i o n t o pay r e n t and m e r e l y r e t u r n e d the

key t o t h e l a n d l o r d and v a c a t e d t h e premises. S i r d a h does n o t

address whether S i r d a h ' s l e a s e had a p r o v i s i o n f o r t e r m i n a t i o n

such as t h e l e a s e between t h e Church and W a t e r f o r d Park, LLC.

304 Ga. App. 34 8 (2 010). The Georgia Court o f Appeals merely

h e l d t h a t : (1) l a n d l o r d d i d n o t a c c e p t t e n a n t ' s s u r r e n d e r of the

l e a s e d premises by a c c e p t i n g t h e key and was n o t r e q u i r e d t o

m i t i g a t e i t s damages by r e - l e a s i n g t h e p r e m i s e s , and (2)

a l l e g a t i o n s i n t e n a n t ' s unsworn answer were i n s u f f i c i e n t t o

c r e a t e a t r i a b l e i s s u e as t o whether t e n a n t was e n t i t l e d t o a

s e t o f f . I d .

I n t h i s case, t h e l e a s e between t h e Church and t h e l a n d l o r d ,

c o n t a i n s an e a r l y t e r m i n a t i o n p r o v i s i o n and t h e Church gave

p r o p e r n o t i c e o f i t s i n t e n t t o t e r m i n a t e t h e l e a s e . The Church's

defense o f c o n s t r u c t i v e e v i c t i o n i s s u p p o r t e d by sworn

a f f i d a v i t s , u n l i k e t h e i n s u f f i c i e n t unsworn answer i n S i r d a h .

A c c o r d i n g l y , t h e Church i s n o t l i a b l e f o r l e a s e payments f o r more

t h a n n i n e t y (90) days f r o m J u l y 30, 2010.

158626.1 20

I I I . CONCLUSION

The Church has c l e a r l y s e t f o r t h genuine i s s u e s o f d i s p u t e d

f a c t w hich may o n l y be r e s o l v e d by a t r i e r o f f a c t .

WHEREFORE t h e Church r e s p e c t f u l l y r e q u e s t s t h a t t h e Court

deny P l a i n t i f f s ' M o t i o n f o r Summary Judgment f o r t h e reasons s e t

f o r t h h e r e i n .

R e s p e c t f u l l y s u b m i t t e d ,

DILLARD & GALLOWAY, LLC

{Liu*. fjLaXuA G. Douglas D i l l a r d S t a t e Bar No. 221900 Andrea C a n t r e l l Jones S t a t e Bar No. 398440

A t t o r n e y f o r t h e Church o f S c i e n t o l o g y o f Georgia, I n c . 3 5 00 Lenox Road, N.E. S u i t e 760 A t l a n t a , Georgia 30326 (404)965-3680

158626.1 21

CERTIFICATE OF SERVICE

I hereby c e r t i f y t h a t I have t h i s day serve d a copy o f t h e

w i t h i n and f o r e g o i n g DEFENDANT'S MEMORANDUM OF LAW IN OPPOSITION

TO PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT upon a l l p a r t i e s t o

t h i s m a t t e r by d e p o s i t i n g a t r u e copy o f same i n t h e U. S. M a i l ,

p r o p e r postage p r e p a i d , addressed t o t h e p a r t i e s o f r e c o r d as

f o l l o w s :

J e f f Golomb, E s q u i r e KRAUSE GOLOMB & WITCHER, LLC 1447 Peachtree S t r e e t , NE, S u i t e 414 A t l a n t a , Ga. 3 0309

T h i s 8 t h day o f J u l y 2011.

158626.1 22