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Sherritt v. SB Paulding Commons, LLC

Court affirms enforceability of a lease guaranty but vacates calculation of damages in a lease dispute and remands for evaluation of penalty clause under the proper standard

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Markle, Judge. Christian Sherritt appeals from the trial court’s order granting summary judgment to SB Paulding Commons, LLC (“SBPC”) in this suit to enforce a guaranty. On appeal, Sherritt argues that the guaranty was unenforceable because it failed to properly name the debtor; the award of 150 percent of the rent was an unenforceable penalty; and there was insufficient evidence to establish damages and attorney fees. For the reasons that follow, we affirm the trial court’s conclusion that the guaranty was enforceable and that there was sufficient evidence to establish the amount of damages, but we vacate the damages award to the extent it included the award of 150 percent of rent and attorney fees, and remand the case for further proceedings. We review de novo a grant or denial of summary judgment, viewing the evidence and all reasonable conclusions and inferences drawn from it in the light most favorable to the nonmovant. Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Massey v. State Farm Fire & Cas. Co., 363 Ga. App. 588, 589 (871 SE2d 685) (2022). So viewed, the record shows that, in July 2021, SBPC entered into a lease agreement to let retail space in its shopping center to Cesium, LLC, d/b/a Marigold Market. The lease identified the “tenant” as Cesium, and the “guarantor” as Christian Sherritt. As is relevant to this appeal, the lease contained the following clauses: Each of the individuals identified as guarantors . . . shall execute and deliver to Landlord a personal guaranty of Tenant’s obligation under this Lease .  . . contemporaneous with the execution of this Lease.

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