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Thor Gallery at S. DeKalb LLC v. Monger

The state court lacked jurisdiction over a case involving the rescission of a commercial lease, because the tenant sought affirmative equitable relief in its motion for rescission.

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Thor Gallery at South DeKalb, LLC Thor Gallery appeals from an order of the State Court of Gwinnett County that rescinded a commercial lease between Thor Gallery and Monger Investment Group, LLC and Monger Entertainment Group, Inc. collectively Monger and required Thor Gallery to return Monger’s security deposit. One of Thor Gallery’s arguments on appeal is that the State Court of Gwinnett County lacked jurisdiction to provide Monger with the remedy of equitable rescission. For the reasons explained below, we agree and therefore vacate the state court’s order and remand this case with direction that it be transferred to the Superior Court of Gwinnett County.

The record shows that the lease between the parties required Monger to obtain specified insurance before the lease commencement date, that the lease would not commence until Thor Gallery delivered possession to Monger, and that Monger’s failure to obtain insurance would be considered a default entitling Thor Gallery to terminate Monger’s right of possession without terminating the lease. When Monger discovered shortly after the lease was signed that the specified insurance was unavailable, it requested that Thor Gallery cancel the lease and return its security deposit. In the alternative, it requested that Thor Gallery revise the insurance requirements in the lease.

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