Efficiency Lodge, Inc. v. Neason

316 Ga. 551

889 S.E.2d 789

EFFICIENCY LODGE, INC. v. NEASON et al.

S22G0838

Supreme Court of Georgia.

Decided: June 21, 2023

Roy E. Barnes, The Barnes Law Group, LLC, 31 Atlanta Street, Marietta, Georgia 30060, for Appellant.

Charles R. Bliss, Atlanta Legal Aid Society, Inc., 54 Ellis Street, NE, Atlanta, Georgia 30303, Harold T. Daniel, Jr., Harold Daniel Law LLC, Daniel House, 119 The Prado NE, Atlanta, Georgia 30309, Elizabeth Ann Guerrant, Lindsey Meredith Siegel, Rachel Miller Lazarus, Atlanta Legal Aid Society, Inc., 246 Sycamore Street, Suite 120, Decatur, Georgia 30030, David Alfred Webster, Attorney At Law, 356 Fourth Street NE, Atlanta, Georgia 30308, for Appellee.

Miriam Fisher Gutman, Jamie B.J. Rush, Southern Poverty Law Center, 150 E. Ponce de Leon Avenue, Suite 340, Decatur, Georgia 30030, for amici curiae.

Pinson, Justice.

The three plaintiffs in this case had each rented rooms at an extended-stay motel for some time. They fell behind on their rent and were threatened with immediate eviction. They sued to stop that from happening, claiming that they were in a landlord-tenant relationship with the motel and so could not be evicted without dispossessory proceedings in court. The motel, however, argued that it had signed agreements with the plaintiffs that foreclosed their claims because, among other things, the agreement stated that their relationship was one of "Innkeeper and Guest," and "not ... Landlord and Tenant." The trial court agreed with the plaintiffs, and the Court of Appeals affirmed. We granted review.

We now vacate the Court of Appeals’ opinion and remand with direction so that the trial court may determine the parties’ relationship under the proper legal framework, which we set out briefly here and fully below. The key question for the trial court is whether the parties created a landlord-tenant relationship. That relationship is created when a property owner "grants" to another the right "simply to possess and enjoy the use of" the owner's property, either for a fixed time or at the will of the grantor. OCGA § 44-7-1 (a). This grant can be made expressly in a written agreement, but it may also be implied from the tenant's possession of the property with the landlord's consent. As to possession, for reasons we explain below, a person who uses the property as a dwelling place—as their home—can ordinarily establish actual possession for purposes of showing a landlord-tenant relationship. As to consent, whether the owner consented to another's possession is determined by first looking to a written agreement between the parties if one exists. Evidence of the parties’ conduct may also be probative if a written agreement is ambiguous, or to show that the parties changed or mutually departed from the agreement.

We leave it for the trial court to apply this framework in the first instance, consistent with this opinion.

1. Background

(a) Legal Framework

Two legal relationships are at issue in this case. Both are between a property owner and a person who occupies that property, and both are defined by statute. Under either relationship, if the occupant fails to pay rent, the owner may take steps to remove him. But the rights of the non-paying occupant depend a great deal on which relationship he has with the property owner.

The first relationship is that of landlord and tenant. A landlord-tenant relationship is created when "the owner of real estate grants to another person, who accepts such grant, the right simply to possess and enjoy the use of such real estate either for a fixed time or at the will of the grantor." OCGA § 44-7-1 (a). If a tenant "holds possession of lands or tenements over and beyond the term for which they were rented or leased to such tenant or fails to pay the rent when it becomes due," the landlord may make a demand for possession, OCGA § 44-7-50 (a), and if the tenant does not deliver possession, the landlord may seek a writ of possession in superior court. OCGA § 44-7-49 et seq. In that proceeding, the tenant has rights, too, including the rights to assert defenses, to be heard at trial, and to appeal an unfavorable decision. OCGA §§ 44-7-51 ; 44-7-53 ; 44-7-56. These rights cannot be waived by contract. OCGA § 44-7-2 (b).

The second relationship is that of innkeeper and guest. An inn is a "tavern[ ], hotel[ ], [or] house[ ] of public general entertainment for guests," and a guest is "a person who pays a fee to the keeper of an inn for the purpose of entertainment at that inn." OCGA § 43-21-1. Unlike a landlord, an innkeeper does not need to file a writ of possession to remove a non-paying guest. Instead, the innkeeper may use a statutory "lockout" remedy when certain conditions are met: the guest must have signed a written statement "prominently setting forth in bold type the time period during which [the] guest may occupy an assigned room," and the agreed-upon time period must have expired. OCGA § 43-21-3.2. Under this lockout remedy, "the guest may be restrained from entering such room and any property of the guest may be removed by the innkeeper to a secure place where the guest may recover his or her property without liability to the innkeeper." Id.

(b) Facts

Efficiency Lodge advertises as an extended-stay motel: its website invites guests to "Stay a nite or stay forever." The three plaintiffs—Armetrius Neason, Lynetrice Preston, and Altonese Weaver—each occupied their rooms at the Lodge for months or years. Neason still stays there, but Preston and Weaver have left.

When the plaintiffs first moved into Efficiency Lodge, they each signed a rental agreement. Neason and Preston also each signed a second agreement sometime after moving in. According to Neason, his second agreement was signed when he moved to a new room within the Lodge. ¹

Preston's and Neason's rental agreements each stated that "The relationship of Innkeeper and Guest shall apply and not the relationship of Landlord and Tenant." Each referred multiple times to the occupant and the Lodge as, respectively, "Guest" and "Innkeeper." Both agreements also provided that rent was due every week and that management reserved the right to enter any room "for the purpose of inspections, housekeeping, maintenance and pest control." Both agreements had a space for listing additional occupants of the room, and both provided that "Guest and other occupants listed on rental agreement shall be the only persons who will reside in rental unit." Neither agreement listed any additional occupants, although Preston's daughters and grandson lived in the room with her. Preston testified that the Lodge told her she did not need to name her daughters or her grandson on her agreement.

The two agreements addressed the term of occupancy in slightly different ways. Both agreements included a blank space for the ending date of occupancy, and on both, the space was left blank. Neason's agreement stated that occupants could "rerent on a week to week basis." Preston's agreement specified that she was "only allowed to stay for 180 days straight," after which she would have to vacate for two days before she could re-rent, although Preston testified that she lived at the Lodge consistently for two years without leaving and coming back. Finally, both agreements provided that if Efficiency Lodge terminated the agreement early for any violation of the agreement, "Guest shall be responsible for any and all expenses including attorney's fees and court cost incurred in affecting the eviction."

All three plaintiffs say, and the Lodge does not contest, that they used Efficiency Lodge as their home. Neason received his mail there, and he listed the Lodge as his address on his driver's licenses. Preston—who lived in her room with her teenage daughters and her grandson—used the Lodge's address to register her daughters for school, and the school bus picked them up there. In addition, both Neason and Preston decorated their rooms and moved in their personal belongings, including furniture and appliances. Preston also provided her own linens. The plaintiffs were responsible for cleaning their rooms; the Lodge did not provide them with cleaning or repair services.

In 2020, during the COVID-19 pandemic, all three plaintiffs fell behind on their rent. In April 2020, Efficiency Lodge sent a letter to Preston and Weaver asking that they make arrangements to pay rent. The letter informed the plaintiffs that "Those guest[s] who have been with us for over 90 days may no[ ]longer be ‘guest[s],’ you may be ‘tenants at will.’ This means we may have to go through the courts to evict you for non-payment. Efficiency Lodge is trying to avoid this because per your rental agreement YOU will be the one responsible for all COURT COST[S]." Neason, although he did not receive a letter, was also led to believe that he could be evicted if he did not bring his rent current. Weaver ultimately was locked out of her room, although the other two plaintiffs were not.

(c) Proceedings Below

The three plaintiffs sued. They asked for a permanent injunction to stop Efficiency Lodge from evicting Neason and Preston without filing dispossessory actions against them, and for damages to compensate Weaver for her past eviction. All three plaintiffs also asserted a general claim for damages. And they sought a temporary restraining order and interlocutory injunction to preserve the status quo while the case proceeded. Efficiency Lodge answered and then moved for judgment on the pleadings. The trial court held a hearing on the injunction motion and granted an interlocutory injunction. The plaintiffs then asked the court to convert it into a permanent injunction.

In separate orders, the trial court denied the Lodge's motion for judgment on the pleadings and granted the permanent injunction. The trial court noted that the plaintiffs used the Lodge as their long-term home with the Lodge's "permission and consent"; that the Lodge explicitly acknowledged in the April 2020...